PATHE COMMUNICATIONS CORP
10-Q, 1994-08-15
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                                UNITED STATES 
                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.   20549

                                   FORM 10-Q

(Mark One)

[X]  QUARTERLY  REPORT PURSUANT  TO  SECTION 13  OR  15(d) OF  THE  SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended          June 30, 1994

                                      OR

[ ]  TRANSITION  REPORT  PURSUANT TO  SECTION 13  or  15(d) OF  THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from                to 


Commission file number 0-12252

                       PATHE COMMUNICATIONS CORPORATION
            (Exact name of registrant as specified in its charter)

              DELAWARE                       13-2624802
   (State or other jurisdiction of        (I.R.S. Employer
   incorporation or organization)        Identification No.)



                   c/o The Law Offices of Fredric S. Newman
                         10 E. 40th Street, 43rd Floor
                           New York, New York  10016
                   (Address of principal executive offices)
                                  (Zip Code)

                                (212) 545-1900
             (Registrant's telephone number, including area code)


     Indicate by check  mark whether the registrant (1)  has filed all reports
required to be filed by Section 13  or 15(d) of the Securities Exchange Act of
1934  during the  preceding 12  months (or  for such  shorter period  that the
registrant was required  to file such  reports), and (2)  has been subject  to
such filing requirements for the past 90 days.  Yes   X   No

     As of August 12, 1994 there were 116,746,810 shares of  common stock, par
value $.01 per share, of the registrant outstanding.

                       PATHE COMMUNICATIONS CORPORATION

<TABLE>

                                                                      INDEX


                                                                                               Page No.
                 <S>                                                                           <C>
                 PART I -   FINANCIAL INFORMATION

                 Item 1.    Financial Statements

                            Condensed Balance Sheets -
                            June 30, 1994 and December 31, 1993  . . . . . . . . . . . . . . .   3
<PAGE>
                            Condensed Statements of Operations -
                            Quarter Ended June 30, 1994 and 1993 . . . . . . . . . . . . . . .   4
                            Six Months Ended June 30, 1994 and 1993  . . . . . . . . . . . . .   5

                            Condensed Statements of Cash Flows -
                            Six Months Ended June 30, 1994 and 1993  . . . . . . . . . . . . .   6

                            Notes to Condensed Financial Statements  . . . . . . . . . . . . .   7

                 Item 2.    Management's Discussion and Analysis of
                            Financial Condition and Results of Operations  . . . . . . . . . .  17

                 PART II -  OTHER INFORMATION

                 Item 1.    Legal Proceedings  . . . . . . . . . . . . . . . . . . . . . . . .  19

                 Item 6.    Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . .  19
                 </TABLE>




<TABLE>

                                                        PATHE COMMUNICATIONS CORPORATION

                                                            CONDENSED BALANCE SHEETS

                                                                 (in thousands)

                                                                                           June 30,        December 31,
                                                                                             1994              1993
                                                                                         (unaudited)
                 ASSETS:
                 <S>                                                                    <C>                <C>
                 Cash and cash equivalents . . . . . . . . . . . . . . . . .            $       108        $        343

                 Accounts and notes receivable . . . . . . . . . . . . . . .                      -                 264

                 Other assets  . . . . . . . . . . . . . . . . . . . . . . .                    657                 749
                                                                                        $       765        $      1,356


                 LIABILITIES AND STOCKHOLDERS' DEFICIT:

                 Liabilities:

                 Accounts payable and accrued
                   liabilities . . . . . . . . . . . . . . . . . . . . . . .            $    54,694        $     47,930
                 Bank and other debt . . . . . . . . . . . . . . . . . . . .                175,544             173,412
                 Other liabilities . . . . . . . . . . . . . . . . . . . . .                    564                 564
                 Subordinated debt . . . . . . . . . . . . . . . . . . . . .                 47,559              47,156
                      
                      Total liabilities  . . . . . . . . . . . . . . . . . .                278,361             269,062

                 Stockholders' Deficit:

                 Preferred stock - $.01 par value,
                   authorized 200,000,000 shares,
                   none outstanding  . . . . . . . . . . . . . . . . . . . .                      -                   -
                 Common stock - $.01 par value,
                   authorized 200,000,000 shares,
                   issued and outstanding
                   116,746,810 shares in 1994
                   and 1993  . . . . . . . . . . . . . . . . . . . . . . . .                  1,167               1,167
                 Additional paid-in capital  . . . . . . . . . . . . . . . .                906,808             906,808
<PAGE>
                   Accumulated deficit . . . . . . . . . . . . . . . . . . .            (1,185,572)         (1,175,681)

                     Total stockholders' deficit . . . . . . . . . . . . . .              (277,597)           (267,706)
                                                                                        $       765        $      1,356



                 The accompanying Notes to Condensed Financial Statements are an integral part of these statements.
                 </TABLE>



<TABLE>

                                                        PATHE COMMUNICATIONS CORPORATION

                                                       CONDENSED STATEMENTS OF OPERATIONS

                                                      (in thousands, except per share data)

                                                                   (unaudited)


                                                                                          Quarter               Quarter
                                                                                           Ended                 Ended
                                                                                          June 30,              June 30,
                                                                                            1994                  1993
                 <S>                                                                    <C>                    <C>
                 General corporate
                   administration expenses . . . . . . . . . . . . . . . . .            $      376              $    4,346


                 Operating loss  . . . . . . . . . . . . . . . . . . . . . .                 (376)                 (4,346)

                 Other income (expenses):
                   Interest expense, net . . . . . . . . . . . . . . . . . .               (4,825)                 (4,044)
                   Interest and other income
                   (expense), net  . . . . . . . . . . . . . . . . . . . . .                     -                       9

                 Loss before income taxes  . . . . . . . . . . . . . . . . .               (5,201)                 (8,381)
                 Provision for income taxes  . . . . . . . . . . . . . . . .                     -                       -

                 Net loss  . . . . . . . . . . . . . . . . . . . . . . . . .            $  (5,201)              $  (8,381)


                 Net loss per common share . . . . . . . . . . . . . . . . .            $   (0.04)              $   (0.07)











                 The accompanying Notes to Condensed Financial Statements are an integral part of these statements.
                 </TABLE>



<TABLE>

                                                        PATHE COMMUNICATIONS CORPORATION
<PAGE>
                                                       CONDENSED STATEMENTS OF OPERATIONS

                                                      (in thousands, except per share data)

                                                                   (unaudited)



                                                                                         Six Months                 Six Months
                                                                                            Ended                     Ended
                                                                                          June 30,                  June 30, 
                                                                                            1994                       1993
                 <S>                                                                    <C>                      <C>
                 General corporate
                   administration expenses . . . . . . . . . . . . . . . . .            $       914             $      4,787


                 Operating loss  . . . . . . . . . . . . . . . . . . . . . .                  (914)                  (4,787)

                 Other income (expenses):
                   Interest expense, net . . . . . . . . . . . . . . . . . .                (8,976)                  (7,959)
                   Interest and other income
                   (expense), net  . . . . . . . . . . . . . . . . . . . . .                      -                       26

                 Loss before income taxes  . . . . . . . . . . . . . . . . .                (9,891)                 (12,720)
                 Provision for income taxes  . . . . . . . . . . . . . . . .                      -                        -

                 Net loss  . . . . . . . . . . . . . . . . . . . . . . . . .            $   (9,891)             $   (12,720)


                 Net loss per common share . . . . . . . . . . . . . . . . .            $    (0.08)             $     (0.11)
















                 The accompanying Notes to Condensed Financial Statements are an integral part of these statements.
                 </TABLE>


<TABLE>

                                                        PATHE COMMUNICATIONS CORPORATION

                                                       CONDENSED STATEMENTS OF CASH FLOWS

                                                                 (in thousands)

                                                                   (unaudited)


                                                                                         Six Months                 Six Months
                                                                                            Ended                     Ended
                                                                                          June 30,                   June 30,
                                                                                            1994                       1993
<PAGE>
                 <S>                                                                     <C>                       <C>
                 Net cash used in
                   operating activities  . . . . . . . . . . . . . . . . . .            $   (2,367)             $    (9,156)

                 Financing activities:
                   Net additions to borrowed
                     funds   . . . . . . . . . . . . . . . . . . . . . . . .                  2,132                    9,140

                 Cash provided by
                   financing activities  . . . . . . . . . . . . . . . . . .                  2,132                    9,140

                 Increase (decrease) in cash from
                   operating and financing
                     activities  . . . . . . . . . . . . . . . . . . . . . .                  (235)                     (16)

                 Beginning balance -
                   cash and cash equivalents . . . . . . . . . . . . . . . .                    343                       44

                 Ending balance -
                   cash and cash equivalents . . . . . . . . . . . . . . . .            $       108             $         28
















                 The accompanying Notes to Condensed Financial Statements are an integral part of these statements.
                 </TABLE>


                                       PATHE COMMUNICATIONS CORPORATION


                    NOTES TO CONDENSED FINANCIAL STATEMENTS



NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Pathe Communications Corporation  ("Pathe" or the "Company")  has no operating
assets or sources of operating income, and the Company is  currently dependent
on  Credit Lyonnais  Bank Nederland  N.V.  ("CLBN") to  fund its  ongoing cash
requirements.  CLBN controls  the voting rights with respect  to approximately
97%  of the  Company's  common stock.    On May  7, 1992,  CLBN  foreclosed on
59,100,000 shares constituting  98.5% of  the common  stock of  Metro-Goldwyn-
Mayer,  Inc. ("MGM"), which shares constituted substantially all of the assets
of the  Company.   The accompanying unaudited  condensed financial  statements
should be read in  conjunction with the audited financial  statements included
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1993.


NOTE 2 - MARKET FOR THE COMPANY'S COMMON STOCK

On August 28, 1992, the Securities and Exchange Commission, in response to the
application by the New York  Stock Exchange (the "Exchange"), issued  an order
<PAGE>
removing  the  Company's common  stock from  listing  and registration  on the
Exchange.  At this  time the Company has no knowledge  of the existence of any
established public trading market for the Company's common stock.  The Company
does  not  have any  present  plans that  would  result in  the  repurchase or
redemption of its common  stock or in the admission for  trading of such stock
on other exchanges or markets.


NOTE 3 - BANK AND OTHER DEBT

The Company's bank and other debt are summarized as follows (in thousands):

<TABLE>

                                                                                          June 30,                December 31,
                                                                                            1994                      1993
                                                                                         (unaudited)
                                   <S>                                                  <C>                      <C>
                                   Credit facilities                                    $    25,544             $     23,412
                                   Bank note payable                                        150,000                  150,000

                                                                                        $   175,544             $    173,412
                 </TABLE>

Credit facilities.   The Company has  an arrangement with CLBN  upon which the
Company's borrowings are made under  the form of demand promissory notes, with
interest accruing quarterly  at LIBOR plus two  percent.  Any  future advances
are at the absolute  discretion of CLBN.  CLBN provided funding to the Company
to enable  it to make interest payments under  the Company's subordinated debt
agreements  during the  period through  May  1, 1994  on such  obligations not
beneficially owned by CLBN.   CLBN has made no commitment  to the Company that
it will  fund any future  interest or principal  payments with respect  to the
Company's debt, or other obligations,  and the Company currently has  no other
source of funding.

Bank note payable.  In  November 1990, the Company borrowed $150,000,000  from
Sealion Corporation N.V. ("Sealion"), a company affiliated with SASEA Holding,
S.A. (SASEA), which  is affiliated with prior  management of the  Company, and
lent the proceeds to  Melia International N.V. ("Melia"), the  Company's major
stockholder.  Sealion  assigned, as collateral  security, its receivable  from
the  Company to Credit Lyonnais  S.A., the parent of  CLBN.  The obligation is
guaranteed  by Melia  and collateralized  by approximately  51 percent  of the
Company's outstanding  stock.  The obligation  bears interest at  LIBOR plus 2
percent  payable  monthly and,  as amended,  calls  for principal  payments of
$30,000,000 a  month beginning in  January 1992.   None of  these interest  or
principal payments  have  been  made by  the  Company, and  this  facility  is
currently in default.


NOTE 4 - SUBORDINATED DEBT

Subordinated  debt is  summarized as  follows (in  thousands, net  of original
issue discount):
<TABLE>

                                                                                          June 30,                 December 31,
                                                                                            1994                       1993
                                                                                        <C>                      <C>
                 12.375% senior subordinated notes
                   due November 1, 1994  . . . . . . . . . . . . . . . . . .            $    16,937                   16,709
                 12.875% senior subordinated
                   debentures  . . . . . . . . . . . . . . . . . . . . . . .                 26,861                   26,686
                 8.875% convertible senior
                   subordinated debentures . . . . . . . . . . . . . . . . .                  3,761                    3,761
                   
                                                                                        $  47,559               $   47,156  
<PAGE>
                 </TABLE>


NOTE 5 - RELATED PARTY TRANSACTIONS

The  Company has a  credit arrangement with  CLBN (see  Note 3).   Interest of
approximately  $422,000 and  $744,000  was charged  on  such facility  in  the
quarter and six months ended June 30, 1994, respectively.

In connection with the  foreclosure by CLBN on the shares  of MGM common stock
owned by the  Company, the Company acquired, by right  of subrogation, a claim
against Melia  in  the amount  of $343,125,754.   This  claim represented  the
amount of Melia debt owed to  CLBN, which amount was secured by  the pledge of
the  Company's MGM  common  stock, and  which was  bid-in  at the  foreclosure
auction on  May 7, 1992.   On April  16, 1993, the Company  filed a bankruptcy
petition against Melia with  the Bankruptcy Chamber of the  Amsterdam District
Court.   Subsequent  to this  petition,  which was  joined by  CLBN  and other
creditors, Melia was declared bankrupt on April 27, 1993 (see Note 6).


NOTE 6 - COMMITMENTS AND CONTINGENCIES

Litigation.    The  Company  is subject  to  a  consent  decree (the  "Consent
Decree") entered in the United States District Court for the Central  District
of  California  ("California District  Court")  in a  Securities  and Exchange
Commission  civil action commenced against  the Company on  November 19, 1987,
entitled Securities and Exchange Commission v.  The Cannon Group. Inc. et al.,
Case No. 87-07590.   This proceeding  against the Company  and certain of  its
former  directors and  officers  alleged, among  other  things, violations  or
aiding and abetting of  violations of the antifraud, reporting,  proxy, record
keeping  and  internal controls  provisions  of the  federal  securities laws.
Without admitting  or denying the  allegations in the  Commission's complaint,
the Company and certain  individuals settled the action  and consented to  the
entry of a  final judgment  enjoining them from  violating the  aforementioned
provisions of the federal securities laws.

          The Consent Decree  required the Company  to appoint an  independent
person to examine transactions between the Company and related parties for the
period January 1, 1984 through  December 31, 1986.  The independent  person is
required  to deliver a  report to the  Company's Board of  Directors regarding
such  transactions together  with  recommendations regarding  what action  the
Board should take as a result of the examination.  The Company appointed a law
firm as  the independent  person.   In November  1991, the  independent person
resigned without having delivered a report  to the Board of Directors.  In its
resignation  letter, the  independent  person stated  it  had been  unable  to
complete  their  examination  because of  the  Company's  failure  to pay  the
independent person's fees and because certain members of the former management
of the Company had failed to cooperate in the examination.

          Current  management  also  believes  that the  Company  under  prior
management  may  have  violated  other  provisions  of   the  Consent  Decree.
Violations of  the Consent Decree  could result in further  proceedings by the
Commission.   If the Company were  found to have violated  the Consent Decree,
the Company  could be  held in  contempt of  court and  could be subjected  to
substantial  penalties.    The Company  has  informed  the  Commission of  its
concerns  regarding compliance with the Consent Decree and is cooperating with
the Commission  in its  review of  this matter.   While  no assurances  can be
given, management  believes that any punitive measures which may be imposed as
a  result of  violations of  the Consent  Decree would  be imposed  upon those
persons responsible for such  violations (as opposed to the  Company's current
management) and would not have a material adverse effect upon the Company.

          The Commission is currently conducting an investigation into certain
transactions effected  by prior  management of  the Company.   The Company  is
cooperating  fully  with the  Commission in  its  investigation.   The Company
cannot presently determine what, if any, action the Commission might take as a
<PAGE>
result of its investigation.

          On January  22, 1991,  Century West Financial  Corporation ("Century
West") filed  a complaint in Los  Angeles Superior Court  against the Company,
Renta Properties and  others for  breach of  contract, breach  of third  party
beneficiary  contract, bad  faith denial  of contract,  breach of  the implied
covenant  of good  faith  and fair  dealing,  and tortious  interference  with
prospective  economic advantage.  Century West alleges that it acted as broker
for the  sale of 6420 Wilshire  Boulevard and is  owed a commission.   Century
West  seeks compensatory damages in  the amount of  $470,000, interest thereon
and  punitive damages.  A Third Amended Complaint  was filed in this action on
January  14, 1994.  Cross-complaints have been  filed against the Company, and
the Company has filed cross-claims.  A First Amended Cross-Complaint was filed
on August  3, 1994.  In addition, the Company is  advancing defense costs to a
former  employee  and  will  indemnify  him  subject  to  an  undertaking  for
reimbursement under certain circumstances. Discovery is currently underway.  A
trial  date has  been set  for October  24, 1994.   The discovery  cut-off and
motion  cut-off date is  October 7, 1994.   The Company  intends vigorously to
defend this action.

          On  June 18,  1991,  a  complaint was  filed  in  the United  States
District Court for  the Central  District of California  against the  Company,
MGM,  Messrs. Parretti, Fiorini, Globus  and Aurelio Germes  and Maria Cecconi
(Mr. Parretti's  wife) on behalf of a purported class which acquired MGM's 13%
Subordinated Debentures due 1996.   On October 10, 1991, J. Phillip  Williams,
on behalf of  a group  of MGM  bondholders, filed  a complaint  in the  United
States  District  Court for  the Central  District  of California  against the
Company, MGM, CLBN and Mr. Parretti which alleges that the defendants violated
U.S.  securities  laws,  and  conspired  to  deceive  plaintiffs  about  MGM's
financial  condition, markets,  and business  prospects,  thereby artificially
inflating  the price  of MGM's  securities.   The complaint  seeks unspecified
damages.   The Company answered  the complaint on  February 3, 1992.   Limited
discovery was conducted regarding class certification.  On March 23, 1992, the
court  heard and denied Williams' motion for  class certification.  On May 18,
1992,  the court  denied Williams'  motion for reconsideration.   On  July 22,
1992,  another bondholder, Herbert Eisen,  moved to intervene  in the lawsuit.
After  limited  discovery  was  conducted regarding  intervention,  the  court
granted Mr.  Eisen's motion  to intervene.   On December  15, 1992,  Mr. Eisen
filed  a  complaint-in-intervention  that   mirrors  the  allegations  in  the
Williams'  complaint.   The  Company  and MGM  answered  Eisen's complaint-in-
intervention on December  29, 1992.  On October 26,  1993, the parties entered
into a Stipulation of Settlement which would dispose of this matter subject to
Court  approval.    The  settlement,  if  approved, would  create  a  fund  of
$4,500,000  against  which  injured  class members  may  make  a  claim.   Any
unclaimed portion of the fund will be returned to the contributing defendants.
The Company and MGM have funded the settlement.

          On  September 25, 1991,  Century Insurance Ltd.  ("Century") filed a
complaint in Superior Court  against the Company, MGM, Melia,  Comfinance S.A.
("Comfinance"),  CLBN and Mr. Parretti alleging, among other things, breach of
contract,  fraud, constructive fraud,  conversion and conspiracy.   The claims
arise out  of certain  defendants' failure  to pay a  purported $1.75  million
premium in  connection with  plaintiff's  purported issuance  of a  completion
guarantee bond  in connection  with the  financing of  the Merger  and alleged
unpaid  premiums in  connection  therewith. In  addition  to payment  of  this
alleged premium, the plaintiff seeks $34,200,000 in alleged management fees on
three  purported insurance investment bonds  and declaratory relief.   MGM was
voluntarily dismissed  from the  action on  January  3, 1992.   The  plaintiff
served  a second  amended complaint  on  February 3,  1992.   In  addition, on
December  6,  1991, this  case was  consolidated  with an  earlier declaratory
relief suit filed by  CLBN against Century.   The Company  was not a party  to
this earlier  suit.  On February  3, 1993, the court  dismissed with prejudice
Century's complaint against the  Company and all of the other  defendants, for
failure to comply with discovery orders.   On July 14, 1993, Century moved  to
vacate the judgment in the Company's and other defendants' favor, which motion
was denied.  Century has filed a  notice of appeal of denial of its motion  to
<PAGE>
vacate.  The parties  have not completed the appeal  briefing and no date  has
been set for the hearing of the appeal.

          On  January 18,  1991, Andrea  Kune, a  stockholder of  the Company,
filed a derivative lawsuit on behalf  of the Company against Messrs. Parretti,
Fiorini,  Globus, Valentina  Parretti,  Ms. Cecconi,  Antonio Pares-Neira  and
Lewis P.  Horwitz, alleging breach of fiduciary duty,  abuse of control, waste
of  corporate  assets,  fraud  and  deceit,  negligent  misrepresentation  and
constructive fraud.   Certain other  individuals formerly associated  with the
Company were subsequently  named as defendants.   The Company  was named as  a
nominal defendant only.  On September  16, 1991, the Company filed a Statement
of  Non-Response asserting  that  it  had  no obligation  to  respond  to  the
complaint because  the complaint seeks no  relief from the Company.   A second
amended complaint  was filed on July  27, 1992 against the  same defendants in
which the Company was again named as a nominal defendant.  Kune alleges claims
for breach of  fiduciary duty, fraud  and deceit, negligent  misrepresentation
and  constructive fraud against the  defendants.  The  amended complaint seeks
unspecified damages.   The  Company remains a  nominal defendant  only and  no
claims for monetary relief are asserted against it.  A tentative settlement of
the  case  has been  reached  in the  amount of  $4,000,000,  less plaintiff's
attorneys' fees, costs and expenses to be awarded, subject to Court review and
approval.

          On January 27, 1992, Linda Carter filed an application for award for
employer violation  of Section  132(a) of the  Labor Code before  the Workers'
Compensation Appeals Board of the  State of California against the Company and
MGM seeking reinstatement  of employment, back wages  at approximately $21,000
per year plus benefits, and costs of suit.  The application alleges Ms. Carter
was  laid  off  on  March  4,  1991, in  retaliation  for  filing  a  workers'
compensation claim.  The Company is vigorously defending this action.

          On January 21,  1992, CLBN filed an action  in the Delaware Chancery
Court  in which  CLBN asserted  various claims  against the  Company, Gestione
Nuove Attivita  Finanziarie  S.a.r.l. (a  company controlled  by Ms.  Cecconi)
("GENAF"),  Melia  and  certain  subsidiaries of  Melia  seeking,  among other
things, a judicial declaration that:  (i) a purported transfer of common stock
of the  Company  from Melia  and certain  of its  subsidiaries  to GENAF  (the
"Subject Stock") is null, void and without effect; and (ii) the Company should
issue new stock certificates to CLBN representing the  Subject Stock or impose
a constructive trust on the Subject Stock held  by GENAF.  On April 3, 1992, a
final judgment was entered in CLBN's favor.  On or about February 6, 1992, Mr.
Parretti and GENAF applied to the Civil Court in Rome for the appointment of a
custodian  of issued  shares in the  Company and  MGM purportedly  held by Mr.
Parretti and GENAF and for precautionary measures to protect the assets of the
Company and  MGM against further alleged  diminution in value being  caused by
CLBN.  The Court on or about February 24 and March 6, 1992 issued temporary ex
parte orders  decreeing that  the shares  of the Company  and MGM  are validly
within the  custody of the Court, and appointing Paolo Picozza as custodian of
the  shares in  dispute.   With consent  of the  court of  March 6,  1992, Mr.
Picozza purported  to take action  to amend  Pathe's By-Laws  to increase  the
number of directors of the  Company to thirty and to appoint  eight additional
directors of the Company.  Mr. Picozza also purported to take action to remove
the current directors of MGM and to replace them with seven new directors.  On
March 12,  1992, CLBN filed a  special appearance with the  Court objecting to
the  decrees on the  ground, among other  things, that  the stock certificates
presented  to the Court as evidence of  Mr. Parretti's controlling interest in
the Company and  MGM were either already sequestered by  the Delaware Chancery
Court on February 12, 1992, pursuant to an order of that  court dated February
4,  1992 or  previously certified  lost and  replaced, as  well as  on various
procedural and jurisdictional  grounds.  A hearing  was held on  Friday, March
20, 1992 regarding CLBN's special appearance.  On March 18, 1992, Mr. Parretti
and  GENAF filed an  appeal with the  Italian Supreme Court  on jurisdictional
issues and CLBN filed  a counter appeal (no hearing  has so far been  fixed by
the Supreme Court).   A  new temporary order  was rendered on  April 28,  1992
confirming the two  earlier decisions.  The April 28,  1992 order provided for
an  180 day time period  during which Mr.  Parretti and GENAF  should bring an
<PAGE>
action on the merits.  On  October 18, 1992, Mr. Parretti filed an action  for
damages against  CLBN and a hearing was held in March  1993.  On June 10, 1993
the Italian Supreme Court ruled  that the original Italian court did  not have
jurisdiction over these  claims, nullified  the earlier orders  issued by  the
Italian courts and awarded court costs and attorneys' fees to CLBN.

          On  May  6,  1992, Robert  Solomon  filed  a  complaint in  Delaware
Chancery Court against  the Company,  CLBN, Dennis Stanfill,  Alan Ladd,  Jr.,
Charles  Meeker, Kenneth Meyer, Jay Kanter, William Jones, Thomas Carson, Rene
Claude  Jouannet, Bahman Naraghi, Guy  Etienne Dufour, G.  Goirand and Jacques
Bertholier  for breach of  defendants' duties  of fair  dealing and  breach of
fiduciary duties to the public stockholders of the Company  in connection with
the Foreclosure and CLBN's Tender Offer for  the Company's stock at a price of
$1.50 per share.  Plaintiff filed the action on his own behalf and  as a class
action on behalf of a  purported class of public stockholders of  the Company.
On March 15, 1994, Solomon filed an amended class action complaint against the
Company, CLBN and certain of the previously named individuals, but no monetary
relief is  sought against the Company.  The Company plans vigorously to defend
the action.

          On  December  7,   1992,  MGM  filed  an  action   against  Tracinda
Corporation, Jeffrey Barbakow, Kirk Kerkorian, Stephen Silbert (the "Kerkorian
Defendants")  and  Houlihan,  Lokey, Howard  &  Zukin,  Inc.  ("HLHZ") in  the
Superior Court.   The complaint,  last amended in  December, 1992, sets  forth
claims for breach of fiduciary  duty, aiding and abetting breach of  fiduciary
duty, breach of contract and negligence in  connection with the sale of MGM to
the Company in the fall  of 1990.  MGM  alleges, among other things, that  the
Kerkorian Defendants engaged in a scheme to induce  the independent members of
MGM's Board to approve the merger to MGM's detriment.  MGM seeks damages in an
amount of  $750,000,000, punitive damages  according to proof at  trial, and a
declaration that the  indemnity provisions of  certain agreements executed  in
connection with  the merger  do not  cover any  judgment, settlement,  fees or
costs incurred by  the Kerkorian Defendants in a legal action.  On January 27,
1993,  HLHZ filed  an answer denying  the allegations  of the  complaint and a
cross-complaint against  MGM, the  Company  and CLBN  for declaratory  relief,
fraud,  negligent  misrepresentation and  equitable  indemnity.   The  Company
answered  HLHZ's cross-complaint on March  29, 1993.   In the cross-complaint,
HLHZ  sought, among other things,  indemnification from the  Company under the
terms  of an engagement  letter between HLHZ  and the Company  and damages for
fraud,  negligent  misrepresentation  and  equitable indemnity  in  an  amount
according to  proof at  trial, plus  attorneys fees, costs  and expenses.   On
October 13,  1993, a Special Referee in this matter recommended that the Court
enter an order declaring that  the Company be required to advance to  HLHZ its
reasonable attorneys' fees in  this matter pursuant to the  engagement letter,
subject to repayment  if HLHZ were later found  to have committed fraud.   The
Court did  enter such an order,  and the Company moved  for reconsideration of
that decision.   Subsequently MGM, CLBN,  the Company and HLHZ  entered into a
global agreement  to settle all claims  pending.  The terms  of settlement are
confidential, but the Company is not obligated to pay any consideration to any
of  the other parties  to the agreement or  to any third parties.   On July 5,
1994,  the court  entered an  order approving  the settlement.   Consequently,
while the MGM action is still pending, the Company is no longer a party to it.

          On April 16, 1993,  the Company filed a bankruptcy  petition against
Melia  with the  Bankruptcy Chamber  of the  Amsterdam District  Court.   This
petition was joined by  the Dutch tax authorities, Scotti  International N.V.,
Cannon Cinema B.V.  and CLBN.  At a hearing on April 27, 1993, the Court found
that Melia had ceased to pay its debts and declared Melia officially bankrupt.
The Court appointed  Mr. R.W. De Ruuk as official  receiver in the bankruptcy.
The appeal period under the  governing Dutch Bankruptcy Code has lapsed.   Mr.
De  Ruuk has  deposited four public  reports with  the Dutch  authorities.  It
appears to the Company from such reports that no material recovery benefitting
it will be forthcoming.

          On June 29,  1993, Aurelio Germes, a former  officer of the Company,
filed  a declaratory relief  action against the  Company in  the United States
<PAGE>
District Court for  the Central District  of California.   Mr. Germes seeks  a
declaratory  judgment that the  Company is obligated to  pay Mr. Germes' legal
fees  in connection  with the  SEC investigation  and in  defense of  the Kune
matter.  The  Company filed an  answer to this  complaint on August 12,  1993.
Subsequently, upon motion by the Company, the Court determined that the claims
relating to  the SEC investigation were  not ripe, but that  those relating to
the Kune case were.   Trial of the action  is now set for September  26, 1994,
and the Company has moved  to stay the action  pending the final dismissal  of
the Kune action upon its settlement.  The Company intends to vigorously defend
this action.

          On  March 30,  1994, Giancarlo  Parretti, Valentina  Parretti, Maria
Cecconi and Comfinance, S.A. filed suit in Los Angeles Superior Court  against
the  Company and  numerous  other defendants,  including  CLBN, CLBN's  parent
company Credit  Lyonnais S.A., MGM  and former  officers and directors  of the
Company  and  of MGM.    Plaintiffs'  complaint arises  from  alleged  acts in
connection with the Company's merger with MGM in  November 1990 and subsequent
events by  which plaintiffs lost ownership and control of MGM and the Company.
Plaintiffs assert causes of  action for violation of the  Racketeer Influenced
and  Corrupt  Organizations Act,  fraud,  conspiracy  to defraud,  rescission,
injunctive relief,  spoliation of  evidence, malicious prosecution,  breach of
employment  contract,  intentional  interference  with  contract,  intentional
interference   with  prospective   economic  advantage   and  indemnification.
Plaintiffs also purport to bring derivative claims on the Company's behalf for
breach  of fiduciary duty, constructive  fraud and waste  of corporate assets.
The Company believes that  plaintiffs' claims are largely barred  because they
were previously adjudicated  in a  Delaware court.   The  Company demurred  to
several  of the  causes of  action and  the court's  ruling  is pending.   The
Company also  intends to move the  court to dismiss the  complaint and intends
otherwise to defend this lawsuit vigorously.

          By Third Party  Complaint dated July 25, 1994  the Company was named
as a  third  party defendant  in  an  action captioned  Credit  Lyonnais  Bank
Nederland N.V. v.  Tracinda Corporation et  al., Ca. No.  CV 94-2957 R  (BQRx)
pending  in  the United  States District  Court  for the  Central  District of
California  (the "Federal  Action").    In  that  case  Credit  Lyonnais  Bank
Nederland N.V. ("CLBN"),  as plaintiff,  sued certain  former shareholders  of
MGM/UA   Communications  Co.,  including  its  majority  shareholder  Tracinda
Corporation  and  former  officers and  directors  of  MGM/UA, for  fraudulent
conveyance in connection with the November 1990 merger between MGM/UA  and the
Company.   The  complaint charges  that the  defendants engaged  in fraudulent
transfers  including  receipt  of  cash  for  their  shares  in  violation  of
California Civil Code  Sections 3439.04  and 3439.05.   The complaint  alleges
that  in order to  finance the merger,  defendants caused  or permitted MGM/UA
first  to  purchase  the  Company's principal  operating  subsidiaries,  Pathe
Entertainment Inc. ("PEI")  and Cannon  Entertainment, Inc.  ("CEI") for  $625
million which amount far exceeded the fair value  of those two companies.  The
complaint  further alleges that  in order to  pay for PEI  and CEI, defendants
caused MGM to enter into long  term licenses of its distribution rights in the
MGM/UA film  library at below  fair value.   MGM/UA then sold  the receivables
under  those licenses for current, discounted cash payments which were applied
toward the purchase price of PEI and CEI.  As the selling MGM/UA shareholders,
defendants were  the ultimate recipients of  the proceeds of the  sale of such
assets.  The complaint  charges that as a result of these transactions and the
net transfer of moneys from MGM/UA to defendants for less than fair value, the
combined company was  rendered insolvent.  As a creditor  of MGM, CLBN charges
that   the  Tracinda  Defendants   caused  such  transfers   with  actual  and
constructive  intent  to  hinder,   delay  or  defraud  it  in   violation  of
California's  fraudulent transfer laws (Cal.  Civ. Code Section  3439 et seq).
In the Federal Action CLBN  seeks $625 million plus punitive damages  from the
defendants.

          In addition to filing  an answer and counterclaim against  CLBN, the
Tracinda  Defendants have brought a third party complaint against the Company.
Defendants  have  sued  the  Company  for  contractual  indemnity,  breach  of
contract,  breach of  warranty,  declaratory relief,  equitable indemnity  and
<PAGE>
equitable  contribution.   On  the  contractual  indemnity claims,  defendants
charge  that, under certain agreements executed in connection with the merger,
the Company  expressly agreed to indemnify them against costs of legal defense
or  any liability  arising  out of  claims  based on  the merger  transaction,
including those potentially arising out of the Federal Action.  In particular,
defendants  charge that  the  Company  agreed  to  such  indemnity  under  the
Agreement  and Plan  of Merger and  the Stock  Purchase Agreement.   The Third
Party Complaint further alleges  that the Company also agreed under  the Stock
Purchase Agreement to  ensure that  the total consideration  exchanged by  the
Company for the $625  million payment would be worth at  least that amount and
if  it subsequently  proved  to  be  inadequate,  the  Company  would  deliver
sufficient additional assets to cover the difference (the "Makeup Provision").
Defendants charge that if it is determined  in the Federal Action that MGM did
not receive reasonably equivalent value for PEI and CEI, then the Company will
be  liable  for  damages  proximately  caused  by its  breach  of  the  Makeup
Provision.  

          As to the breach of the warranty claim, defendants allege that under
the  Agreement and Plan of Merger, the  Company warranted MGM would be solvent
post-closing (the "Warranty  Provision") and that any finding in the CLBN case
that MGM was insolvent constitutes a breach of such warranty.  Defendants also
seek declaratory relief  regarding the parties'  rights and obligations  under
the aforementioned indemnity provisions, the Makeup Provision and the Warranty
Provision and that the Company and CLBN, as its alter ego, are obligated under
such provisions  to pay  the costs  of defense  of the Federal  Action and  to
indemnify them for any prospective judgment or settlement reached. 

          Defendants finally allege  that the  misconduct of  the Company  and
CLBN both prior  to and post merger led  to the harm alleged in  the complaint
and, thus,  defendants are  entitled to equitable  indemnity and  contribution
against  judgment rendered  in favor  of CLBN  in the  CLBN case.   Defendants
charge as  acts of  misconduct that  the Company  and CLBN  misrepresented the
financing for the merger pre-merger and misappropriated funds post-merger. 

          As to all  of these  claims, defendants allege  that CLBN's  control
over the  Company and the Company's inability to cover any potential liability
to defendants  constitute grounds for treating  the Company and  CLBN as alter
egos.    Thus,  defendants  seek  a   ruling  that  CLBN  is  liable  for  any
determination that the Company is liable to defendants.

          The  Company denies the allegations of the third party complaint and
will vigorously defend the claims asserted against it.

          Demands for the advancement of legal fees and indemnification in the
defense of the Kune and Williams actions have been made by Giancarlo Parretti,
Maria Cecconi, and  Valentina Parretti  (collectively, the  "Parrettis").   In
addition, a demand for the advancement  of legal fees for defense of  the Kune
case has been made  by Yoram Globus.  The Company has  rejected these demands.
In  addition, there have been additional claims for indemnification and/or the
advancement of expenses  and legal fees which have been  asserted from time to
time by former  officers, directors and/or employees  of the Company, and  the
Company reviews each demand on a case by case basis.


NOTE 7 - SUPPLEMENTARY CASH FLOW INFORMATION

Interest paid was  approximately $913,000 and $3,288,000 during  the six-month
periods ended June 30, 1994 and 1993, respectively.



Item 2.   Management's Discussion  and  Analysis of  Financial  Condition  and
          Results of Operations


The  following discussion  should be  read in  conjunction with  the Company's
<PAGE>
Condensed Financial Statements and  the related notes thereto.   References to
Notes refer to the notes to such statements.


General

The  Company has no operating assets or  sources of income (see "Liquidity and
Capital Resources" below; Note 1).

Results of Operations

The Company  reported net losses for the quarters ended June 30, 1994 and 1993
of  ($5,201,000)  and ($8,381,000),  or ($.04)  and  ($.07) per  common share,
respectively, based on 116,747,000 weighted average common shares outstanding.
For the six-month periods ended  June 30, 1994 and 1993, the  Company reported
net  losses   of  ($9,891,000)  and  ($12,720,000),  or   ($.08)  and  ($.11),
respectively.

General Corporate Administration Expenses

General  corporate  administration  expenses  compared  to  the  1993  periods
decreased   by  approximately  $4,000,000,  or   90%,  for  the  quarter,  and
$3,900,000, or 80%, for the six-month period, because the Company had incurred
higher  legal fees  and certain  settlement costs  associated with  litigation
during the 1993 periods.

Other Income (Expense)

The  increase in the  net interest expense  by approximately $800,000  for the
quarter  and $1,000,000  for  the  six-month period  is  due primarily  to  an
increase in the  principal amount borrowed  from CLBN and  an increase in  the
applicable interest rates.

Liquidity and Capital Resources 

The Company  is currently dependent on CLBN for additional capital to fund its
cash requirements.   CLBN may, in  its absolute discretion,  decide whether or
not to advance additional funds to the Company.

The  Company's  subordinated   debt  agreements  contain  cross   acceleration
provisions which  generally provide that  if holders of certain  other debt of
the Company accelerate the maturity of such debt, such acceleration would be a
default with  respect to the subordinated  debt.  If such event  were to occur
and certain notices are given  under the various agreements and  indentures, a
substantial portion of  the Company's subordinated debt  could be accelerated.
The Company has not received any such notices.

The Company currently does not  meet the minimum net worth covenant  under its
12  7/8% and  8 7/8%  debenture Indentures  as its  net worth  has  been below
$37,500,000  for more than two  consecutive quarters.  Upon  the occurrence of
such event,  such Indentures,  as amended, require  the Company  to redeem  10
percent of the aggregate  principal amount of the debentures  then outstanding
(at 100 percent of the principal amount) plus accrued interest by the last day
of the following quarterly period. Similar payments must be made semi-annually
thereafter until all outstanding debentures are redeemed, unless the net worth
is above $37,500,000 as of the last day of any subsequent quarter. The Company
can  satisfy  the  redemption  requirement  through  previously  acquired  and
canceled  debentures.  Due  to  the  significant  amount  of  such  debentures
previously acquired by  the Company, the Company will not  be required to make
any cash redemptions for the foreseeable future.

Additionally, the Company is currently in default on its existing indebtedness
to Sealion.


Commitments and Contingencies
<PAGE>
The Company  is a  party  to various  lawsuits (see  Note 6).   A  significant
adverse judgment in one  or more of the cases could  have a material impact on
the Company's liquidity.

Impact of Interest Rates

Any  significant increase in interest  rates would have  a substantial adverse
effect on the Company's financial position.



                          PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

See Note 6 regarding various material legal proceedings.


Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

         11 - Computation of loss per common share.


(b)  Reports on Form 8-K

         No reports  on Form 8-K  have been  filed during  the quarter  ending
     June 30, 1994.

                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of  1934, the
registrant has  duly caused  this report  to be signed  on its  behalf by  the
undersigned thereunto duly authorized.


                       PATHE COMMUNICATIONS CORPORATION



Date:  August 12, 1994                   s/ Fredric S. Newman
                                           Fredric S. Newman
                                               President
                                         (Principal Financial
                                        and Accounting Officer)


                                 EXHIBIT INDEX



Exhibit         Description                              Page

  11            Computation of Loss Per Common
                Share                                    1


                                                         Exhibit 11

<TABLE>
<PAGE>
                                                        PATHE COMMUNICATIONS CORPORATION

                                                      COMPUTATION OF LOSS PER COMMON SHARE

                                                      (in thousands, except per share data)

                                                                                           Quarter                   Quarter
                                                                                            Ended                     Ended
                                                                                          June 30,                   June 30,
                                                                                            1994                       1993

                 <S>                                                                    <C>                      <C>
                 Net loss  . . . . . . . . . . . . . . . . . . . . . . . . .            $   (5,201)             $    (8,381)

                 Weighted average
                   common shares outstanding . . . . . . . . . . . . . . . .                116,747                  116,747

                 Primary loss per
                   common share  . . . . . . . . . . . . . . . . . . . . . .            $     (.04)             $      (.07)





                                                                                         Six Months                 Six Months
                                                                                            Ended                     Ended
                                                                                          June 30,                   June 30,
                                                                                            1994                       1993


                 Net loss  . . . . . . . . . . . . . . . . . . . . . . . . .            $   (9,891)             $   (12,720)

                 Weighted average
                   common shares outstanding . . . . . . . . . . . . . . . .                116,747                  116,747

                 Primary loss per
                   common share  . . . . . . . . . . . . . . . . . . . . . .            $     (.08)             $      (.11)
                 </TABLE>
<PAGE>


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