The Los Angeles Superior Court has approved billionaire Kirk Kerkorian’s amended countersuit against French bank Credit Lyonnais, which seeks $ 675 million plus punitive damages.
The suit alleges fraud, conspiracy and racketeering in connection with the bank’s lending activities to its client, Italian financier Giancarlo Parretti. Suit alleges activities took place around the time of the 1990 merger between Parretti’s then-Pathe Communications Corp. and Metro-Goldwyn-Mayer/United Artists Communications Co.
The merger left a flurry of pending lawsuits in its wake. MGM and its owner, CL, filed a $ 1.25 million suit against former MGM owner Kerkorian alleging fraud and breach of fiduciary duty (Daily Variety, Dec. 8, 1992).
On Dec. 17, Kerkorian retaliated with a $ 675 million countersuit against the bank, but it was dismissed and subsequently re-filed (Daily Variety, Feb. 25). That version was greenlighted in L.A. Superior Court Wednesday.
As reported, the amended suit claims the action “arises from a long-standing and far-reaching fraudulent scheme conceived and executed by the Credit Lyonnais ‘family’ of financial institutions to conceal improper and unlawful banking practices from regulators and to defraud the creditors, shareholders, and affiliates of their client borrowers.”
A spokesman for the bank said: “This is still a feeble defense to the bank’s original complaint. This isreally a simple matter of fraud. Kerkorian knew the company he was selling would be insolvent. He and his co-conspirators hid this from the bank. We will prove this in court.”
However, in a phone interview from Paris, Kerkorian’s attorney Patricia Glaser (of Christensen, White, Miller, Fink & Jacobs) countered: “In reality it means a lot … the guy that got hurt is the guy who just wanted to sell the studio (Kerkorian). He got tremendously taken advantage of.”
Glaser is in France conducting three weeks of depositions with a number of top Credit Lyonnais exex, including the bank’s chairman Jean-Yves Haberer.
Glaser said there will be a hearing next Tuesday evening, where a judge will decide whether those depositions and other documents can be made public, despite the bank’s legal request for confidentiality.
The bank is “saying they want these thousands of pieces of paper and documents and all the depositions to be secret and withheld from the press and the public and that is very unusual. In California, it is typical that everything is open to the public,” per Glaser.
Not so, says the bank spokesman. “Confidentiality of bank records is recognized all over the world. De-designating the documents would be contrary to that principle. All documents requested by the defendants have been supplied and the proper venue for reviewing those documents is in court.”
The judge will decide Tuesday.