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Orion Pictures majority shareholder John Kluge is doing an end run around bankruptcy court with the formation of Orion Prods. Co., funded via MetProductions, the new affiliate of Metromedia Co.

Meanwhile, Kluge and fellow principal Metromedia shareholder Stewart Sobotnik quietly have been buying up Orion’s common stock, raising their and Metromedia’s stake to 56.08% from 50.1% on June 22. In the interim, investor confidence has bolstered the price of the shares from a low of 2 1/8 last month to a close of $ 6 Monday.

At this point, Orion Prods. Co. has no real slate and a mere $ 1 million in funds from MetProductions, which will be used as “a portion of the production budget for a film being produced by a third party for the homevideo market,” according to Orion Pictures Corp.’s latest 10-K proxy.

The company initially will be managed by Orion Pictures prexy/CEO Len White, who refuses to speculate on a division prexy appointment or a lump sum of production cash from Metromedia. “All additional funding will be on a project-by-project basis at this point,” White said.

When Kluge pulled the plug on Orion in ’90, the once-thriving mini-major — which produced such hits as “Dances With Wolves” and “The Silence of the Lambs”– filed for Chapter 11 bankruptcy. Orion emerged from its bankruptcy last November and cannot legally fund any productions until it pays down most of its debt. With Orion Prods.’s funding coming from MetProductions, and not from Orion Pix, the restriction is effectively circumvented.

In the seven months ended June 30, Orion made three distributions and paid off $ 109 million in debt, said one source. (That third debt payment reportedly will be made public shortly.) As such, the new production partnership has no cash from Orion, no prexy and no pix in the pipeline. It is little more than a structure for the time being.

Orion Pictures Corp. will distribute any product that results from the partnership between the parent company and the Metromedia Co., according to a news release.