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Because of its loans and advances to MGM, the Credit Lyonnais
group was unable to extricate itself from that company’s
financial perils. Ultimately, the Credit Lyonnais group was
forced to wrest control of MGM from Mr. Parretti and foreclose on
the stock interests in MGM. From that point until 1996, the
Credit Lyonnais group had to maintain a constant supervisory
presence at MGM in an effort to right that company and recoup its
loans and advances. To do that, however, the Credit Lyonnais
group had to continue advancing MGM significant amounts to keep
it alive. The 1993 restructuring and the infusion of a new
management team helped MGM to recover; however, by the end of
1995, the Credit Lyonnais group was finished with the film
business and MGM. The Credit Lyonnais group had lent the MGM
companies upwards of $2 billion. It recouped a portion of that
amount on the sale of New MGM in 1996; however, more than $1
billion in outstanding indebtedness remained owing from MGM Group
Holdings. The Credit Lyonnais group had little or no hope of
recovering anything on this amount.
In 1995 and 1996, the Credit Lyonnais group was financially
distressed. Upon the intervention of the French government, CDR
was formed for the specific purpose of liquidating the Credit
Lyonnais group’s “bad” investments and loans, particularly its
investments and loans in the filmed entertainment area. These
“bad” assets included MGM, MGM Holdings, and MGM Group Holdings,
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