While June 6, 1944 will long be remembered, Nov. 24, 2003 won’t have quite the same resonance with the French public. Credit Lyonnais (CL) and the French government have until 9:00 p.m. PST to reach a settlement agreement with federal prosecutors in L.A. over criminal charges arising out of the bank’s takeover of Executive Life Insurance Co. in 1991.
CL had reached a preliminary agreement in September to settle the criminal case, which would have required the French bank Credit Agricole, who now owns CL, to put up $100 million with French insurer MAAF paying $35 million. The Consortium de Réalisation (CDR), a French government agency established to take over CL’s debt mountain in 1995, had reportedly agreed to pay an additional $100 million in fines and to set up a $350 million fund to compensate ELIC policyholders.
However on Oct. 15 the French government rejected the accord, because it did not include a settlement of all charges against French companies and citizens, notably Jean Peyrelevade, who recently resigned as CL’s Chairman, and François Pinault, the French billionaire whose holding company, Artemis Finance, was heavily involved in the deal.
A later intervention by the French Finance Minister, Francis Mer, who met with with U.S. Attorney General John Ashcroft, resulted in a tacit understanding to give the parties until today to reach a settlement agreement. Unless that happens, the U.S. attorney’s office is ready to go forward with criminal proceedings.
CL and the French government, backed by Pinault, are reportedly seeking to conclude an “all-inclusive” settlement, which would end not only the criminal, but also the civil charges against the bank and its affiliates. Attorneys representing California’s insurance department are seeking to recover several billion dollars from CL, Artemis and others stemming from the tacitly acknowledged violations of Calif. and federal laws. The CDR, which is in turn funded by French taxpayers, would eventually pay the bulk of that money.
Unless there is an additional delay, the results of the settlement negotiations should be known by late tonight.
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