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have resolved and settled this insufficient payment by utilizing
your subparticipation to meet the amount owed.” On December 13,
1996, CDR assigned the $79 million receivable to CLIS, effective
as of that date, pursuant to a document entitled “Cession de
Creance”.
G. Dissolution of MGM Holdings and Formation of SMHC
On or about September 28, 1996, MGM Holdings contributed its
Carolco preferred stock and Carolco subordinated notes to MGM
Group Holdings. On October 8, 1996, MGM Holdings was dissolved;
its assets were distributed to CLIS, MGM Holdings’s sole
shareholder. On October 15, 1996, MGM Group Holdings changed its
corporate name to Santa Monica Holdings Corp. (SMHC).
V. The CDR Transaction
A. Initial Contact With Mr. Jouannet
After agreement was reached on the sale of New MGM, one of
Mr. Jouannet’s continuing jobs at CDR was to see what, if
anything, he could realize on the stock of MGM Group Holdings.
CDR and Mr. Jouannet were interested in “monetizing” MGM Group
Holdings as soon as possible.
Sometime before September 11, 1996, Mr. Lerner, on behalf of
Rockport Capital, and Mr. Jouannet, on behalf of CDR, discussed a
possible transaction involving MGM Holdings and MGM Group
Holdings. The Ackerman group hired a French firm (unnamed in the
record) and the law firm of Shearman & Sterling, LLP (Shearman &
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