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Star Of His Own Dubious Epic

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With cinematic flourish, Dino De Laurentiis would jump up from his plate of spaghetti at the boardroom table, wave his cook aside and bolt into the company's kitchen. Nobody, he told his guests, could make cappuccino like the maestro himself! As he spoke, Hollywood's flashiest independent producer would secretly hit the "start" button on an ordinary cappuccino machine. He would then present his charmed visitors with cupfuls of "Dino's special cappuccino -- the best!"

That was a vintage De Laurentiis performance from the mid-1980s, when bankers and investors were enthralled with the gruff-talking miniature (5-ft. 4-in.) movie mogul. De Laurentiis proceeded to lose nearly $200 million of their money in a grandiose and allegedly fraudulent attempt to build an entertainment empire. By 1988, after producing two dozen money-losing pictures in two years, De Laurentiis Entertainment Group filed for Chapter 11 bankruptcy.

Yet De Laurentiis' ability to dazzle and deal is scarcely diminished. In February the 70-year-old legend rose from the tar pits of defeat and litigation to form another company, Dino De Laurentiis Communications, with the financial backing of his friend Giancarlo Parretti, the controversial Italian moneyman who also plans to buy MGM/UA for $1.2 billion. Dino's planned renaissance will begin with five films and a $67 million budget.

De Laurentiis now faces enough doubters to populate a biblical epic. Most of the independent film companies that a bullish Wall Street took public in the mid-1980s -- Cannon, Vestron, New World, Kings Road -- have either passed into bankruptcy or deep financial trouble. But none have burned through as much money in so short a time -- without even a near hit -- as De Laurentiis. Worse still, few if any ventures contained such a web of insider-enriching transactions. Stockholders of DEG, who saw their shares plummet from a peak of $19 to less than 40 cents, have responded with fiery class-action lawsuits. At the same time, DEG is suing De Laurentiis for $50 million, accusing its founder of fraud, misrepresentation and self-dealing.

In a 500-film career that spans half a century, the Italian-born De Laurentiis produced a handful of successes that include the Fellini-directed La Strada (1954), Serpico (1974), King Kong (1976) and Conan the Barbarian (1982). But the hits have been overshadowed by hundreds of commercial duds, most notably the $50 million sci-fi film Dune, a 1984 mega-flop that helped send Dino down the chute.

When he pitched DEG to investors, De Laurentiis promised he would make careful, modestly budgeted pictures. Yet once ensconced at DEG, he refused to share decision-making authority and showed a knack for picking up screenplays that other studios had wisely spurned. For an Old World producer accustomed to making budget-busting epics, the studio's ambitious production slate of twelve to 20 films a year was a script for disaster. One project, the 1986 film Tai- Pan, cost $25 million to make but brought in barely $2 million.

The aging filmmaker ran DEG like a private fiefdom, showering his family members and girlfriend with six-figure salaries or distribution deals. "So much money passed through that building, and I don't know where it all went," says Gary DeVore, DEG's former head of production. "I was one of the highest- placed executives and I didn't even know about the deals with Dino's family."

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