Victor Loewy is back at Motion Picture Distribution, not as chairman of the board, but as a high-paid consultant in charge of little more than the New Line Cinema slate.

Alliance Atlantis’ MPD announced on Sept. 29 that he had rejoined the fold, ending a bitter, months-long split that had put a cloud over MPD’s contract with New Line, in which Loewy remains a lynchpin.

‘I’m a consultant. I’m not running anything, which gives me a different flexibility in my life. And it gives Alliance Atlantis an opportunity to run [MPD] differently,’ Loewy tells Playback.

‘Peace broke out,’ he adds.

Loewy is back as chairman emeritus until his contract comes up for renewal on Dec. 31, 2008, the same day MPD’s output deal with New Line will expire.

The contract is worth millions to MPD – having secured hits including the Lord of the Rings trilogy – and includes a ‘key man clause’ that allows New Line to back out if Loewy leaves.

Loewy is no longer a director or officer of the distributor or any of its affiliates, including Momentum Pictures in the U.K. and Aurum Producciones in Spain.

MPD also withdrew legal proceedings and settled with former CEO Patrice Théroux and former general counsel Paul Laberge, though neither will return. MPD fired Laberge and Théroux in July, after which Loewy quit in protest and stirred speculation that he might form his own distributor.

The reunion also removes a significant barrier to the possible sale of MPD, which is currently under review by parent Alliance Atlantis Communications. British firm Marwyn Investments expressed interest in MPD during the summer.

In a statement, AAC CEO Phyllis Yaffe says only that her company remains ‘committed to announcing the completion of the strategic review of our holding in MPD as soon as possible.’ The review is expected this fall.

Ben Mogil, an analyst at Westwind Partners, recently predicted in a note to investors that AAC will sell off the British and Spanish distribution arms.

AAC might then either eventually unload the distributor, or keep it and its execs on a shorter, less laissez-faire leash.

AAC stock headed up following news of the reunion, trading at just under $36 a share on the TSE. MPD stock has also rebounded to just below $8.

www.allianceatlantis.com