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able to reach an accord with its creditors and emerge from
bankruptcy.
In connection with the $145 million facility agreement,
Pathe and certain of Melia’s stockholders and subsidiaries
entered into certain agreements in April 1991, whereby those
parties guaranteed MGM-Pathe’s obligations under the $145 million
facility agreement and pledged to CLBN all shares of Pathe, MGM-
Pathe, and Melia owned by those parties, to secure all
indebtedness then owing by Pathe (and certain affiliates) to CLBN
(the 1991 pledge agreement). The shares covered by these
agreements represented approximately 89.3 percent of the
outstanding common stock of Pathe and 98.5 percent of the stock
of MGM-Pathe, which shares were held in irrevocable voting trust
agreements in favor of CLBN. As part of this process, Mr.
Parretti entered into corporate governance agreements with CLBN
wherein Mr. Parretti and Pathe ceded responsibility for the day-
to-day management of MGM-Pathe to Credit Lyonnais. On June 17,
1991, as a result of certain actions by Mr. Parretti in violation
of the corporate governance agreements between him and CLBN, CLBN
removed Mr. Parretti and certain other directors of MGM-Pathe.
F. Credit Lyonnais Takes Control of MGM
As of June 1991, Credit Lyonnais exercised effective control
over MGM-Pathe. It controlled all management decisions at MGM-
Pathe and elected MGM-Pathe’s board of directors. During this
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