Warner Bros. has wrestled rights to Don Bluth’s animated films away from MGM via a deal with Hong Kong-based Media Assets, sources confirmed late yesterday.WB is in the final stages of negotiations with Media Assets for all rights to completed pic “Troll in Central Park” and to “Thumbelina,” which will be ready by April. If inked, the deal will also include “The Pebble and the Penguin” (in development) and at least one Don Bluth Ltd. pic per year, sources confirmed. Warner Bros. — which holds worldwide video rights to MGM films anyway –”came up with a better offer,” a person close to the deal said. Whether or not the WB deal is signed, MGM is out of the running for Bluth’s family fare, which reduces MGM’s ’93 distrib slate to 10 pix from 12. Bankruptcy problems MGM owned domestic rights to “Thumbelina,”"A Troll in Central Park” and “The Pebble and the Penguin” until the bankruptcy of Dublin-based Don Bluth Entertainment last August. (At that time, J&M Entertainment of Britain owned all non-U.S. rights.) During the bankruptcy hearings last November, however, the Irish High Court greenlighted the sale of the three pix to a joint venture backed by John Boorman’s Merlin Films and Media Assets, which paid $ 14 million upfront with another $ 5 million pending (Daily Variety, Nov. 13). They reportedly pumped $ 6 million into ‘Troll’ and ‘Thumbelina’ (which had already hit $ 20 million budgets apiece) as part of the deal. Earlier this year, J&M sold non-U.S. rights to Media Assets. J&M previously agreed to an $ 8 million investment in the three films and recouped the $ 3 million plus it had already paid in cash, per one source. “Media Assets paid us off handsomely.” Media Assets is about to launch Don Bluth Ltd. with the creators of “An American Tail”– Bluth and creative partner Gary Goldman — according to Media Assets exec veepee Nicolas James. James refused comment on the pending studio deal but confirmed that “we’re planning a minimum production of one Don Bluth film a year.” During the bankruptcy, “we bid for certain assets, including the three films and others in development. Don and Gary are very much a part of the new company. They are very much on board and we’ve rehired key animation staff and put the nucleus of the new team together.” Neither WB nor MGM representatives would comment.