The two senior executives who left Canadian distributioncompany Motion Picture Distribution (MPD) in July were "terminated for cause",according to a company release issued today.

In the statement, MPD said it had "determined" after "athorough investigation" that Patrice Theroux, former president and CEO, andPaul Laberge, former executive vice president, corporate development andgeneral counsel of MPD, "had not been directing theirfull time and energy to running the business and had been engaged in variousactivities contrary to their contractual and fiduciary duties to the businessincluding, among other matters, willfully deceiving and withholding materialinformation from the Board, advancing business activities for personal gain,and misusing confidential information and Company financial and other resourcesfor personal gain."

It added that the two formerexecutives as well as former chairman Victory Loewy, who resigned his positionon July 19, "remain subject to confidentiality, non-solicitation andnon-competition obligations."

According to a report in Toronto'sGlobe and Mail, Loewy's departure has prompted New Line Cinema to trigger thekey-man clause in its distribution agreement with MPD and end the contract.It is believed Loewy is spear-heading a management buyout of MPD with thebacking of UK-based hedge fund Marwyn Investments LLP, which announced lastweek it is willing to pay up to $414m for the MPD.

If New Line ends its contract withMPD, it has the option of going with a new company set up by Loewy or bydistributing its films through the Canadian distribution arm of Warner Bros, itscousin company within the Time Warner conglomerate.

Today's MPD announcement is a distinct change in tone fromthe original July 20 announcement of the departures of Loewy and Theroux, atext which made no reference to Laberge. Of Theroux, it said simply, he "hasleft the business." The announcement goes on to say, "the Board would like tothank Victor [Loewy} and Patrice [Theroux] for their contributions... and wishthem well in their future endeavours."