Third ‘Talking’ Is His Big Second Chance : Box office: As a bankruptcy veteran, producer Jonathan D. Krane concedes mistakes.

Look who’s back.

Three years after his Management Co. Entertainment Group belly-flopped financially, the once-hot producer Jonathan D. Krane is hoping to stage a comeback with his third “Look Who’s Talking” comedy. The Tristar release opens today, this time with dogs doing the talking instead of kids.

Krane, who is a student of physics in his spare time, is returning after experiencing firsthand one of Hollywood’s Newtonian laws--that what goes up in the movie business eventually comes down. In his case, it happened with a resounding thud.

Once touted as a darling of Wall Street, MCEG in 1990 was forced by creditors to seek protection in Bankruptcy Court so it could be reorganized, with Krane leaving. Chiefly to blame were the acquisition of a foreign distribution company that turned disastrous and a tight credit environment that prevented a temporary loan from being refinanced.

MCEG shareholders were virtually wiped out. One of them was Krane, whose MCEG interest was once worth $15 million on paper. Worse yet, the onetime Wunderkind was trashed publicly by former employees and creditors as a megalomaniac who was obsessed with perks and abrasive to his employees.

“A lot of people seemed glad that I failed,” an admittedly humbled Krane says now. “I learned that I’m not a golden boy. And I also learned that arrogance can be a horrible trait.”

Krane said he hopes “Look Who’s Talking Now” will help him launch a batch of films he is developing with his own funds. He has completed another picture, “Love Is a Gun,” with actor Eric Roberts, for independent Trimark Pictures. Two other films are in the works.

The first “Look Who’s Talking,” in 1989, was a low-budget film that grossed $141 million domestically and $157 million internationally. It remains the most profitable release ever for Tristar Pictures, surpassing even hits such as “Terminator 2: Judgment Day” and “Basic Instinct.”

The second installment, “Look Who’s Talking Too,” in 1990, fell short of the original. It grossed $48 million domestically and $71 million overseas, respectable but disappointing to Krane.

The third picture also revolves around the adventures of a couple, played by John Travolta and Kirstie Alley. Tristar marketing president Buffy Shutt said the film is to open ahead of major holiday competitors such as “Addams Family Values.”

Krane today operates out of the Cape Cod-style home in the Hollywood Hills that he shares with his wife, actress Sally Kellerman. Krane, the son of a Los Angeles car-leasing executive, met Kellerman in a group therapy session. He eventually entered the film business under director Blake Edwards.

MCEG was praised by analysts in the 1980s as striving to keep a lid on rising production costs.

“Look Who’s Talking” earned the company about $5 million. Krane developed a reputation as a cost-conscious producer who required approval of all but the smallest expenses.

“Nobody does it better,” said Travolta, a friend whose career Krane manages. “Jonathan doesn’t allow inflated costs in departments where they normally are higher.”

Krane and others blame the acquisition of Virgin Vision, the foreign distributor, for the downfall of MCEG.

These days, Krane concedes numerous mistakes of his own, among them failing to handle employees well and stretching himself too thin by continuing to manage actors and comics while serving as chief executive.

John Hyde, who was brought in to mop up at MCEG and now runs a successor company, MCEG Sterling, said Krane’s biggest mistake was “to delegate a lot of responsibilities to people who didn’t have the skills to carry them out.”

The betting on Krane’s comeback varies. Hollywood has a notoriously short memory when you have a hit film. But others say the MCEG debacle was such a high-profile failure that it could take time for Krane to regain the reputation he once enjoyed as a producer of profitable films.

“It’s a black mark against him,” one friend said. “He has to earn his place again and convince people.”