UNREPORTED CASE: CREDIT LYONNAIS BANK NEDERLAND, N.V. v. PATHE COMMUNICATIONS CORP., No. 12,150. Skip over navigation
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Copyright Delaware Law School of Widener University, Inc. 1992

Delaware Journal of Corporate Law

UNREPORTED CASE: CREDIT LYONNAIS BANK NEDERLAND, N.V. v. PATHE COMMUNICATIONS CORP., No. 12,150.

Court of Chancery of the State of Delaware, New Castle, December 30, 1991

SUMMER, 1992

17 Del. J. Corp. L. 1099

Author

ALLEN, Chancellor

Excerpt

This is an action under Section 225 of the Delaware General Corporation Law seeking a judicial determination of the persons who constitute the lawfully elected board of directors of MGM-Pathe Communications Company ("MGM"), a Delaware corporation. The principal plaintiff is Credit Lyonnais Bank Nederland ("CLBN" or "the Bank"), a major lender both to MGM and to MGM's parent Pathe Communications Corporation ("PCC"). 1 By reason of claimed defaults by PCC on loans from CLBN that were secured by PCC's controlling block of MGM stock, CLBN now claims to be the legal (registered) owner of that controlling stock interest, at least for purposes of voting it.

Defendants are PCC and three individuals, Giancarlo Parretti, Maria Cecconi and Yoram Globus, each of whom CLBN purported to remove from the MGM board on June 16, 1991. 2 Giancarlo Parretti had for several years been the dominant factor in the ownership and management of PCC. In November 1990, he caused PCC to acquire MGM. Maria Cecconi is Mr. Parretti's partner and wife. Yoram Globus, formerly controlled PCC (then called Cannon Films, Inc.) and continued to work for the firm after Parretti acquired control of it by 1989. Parretti and Globus appear to have had a productive working relationship.

As more fully explained below, the predicate for the claim by CLBN that it had legal power to remove the individual defendants from office is defendants' alleged breach (or a series of alleged breaches) of an agreement referred to as the Corporate Governance Agreement ("CGA"). ...
 
 
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