Breakthrough in Executive Life Settlement Talks

December 11, 2003

French Prime Minister Jean-Pierre Raffarin announced that there has been a breakthrough in negotiations between the French Government and federal prosecutors in the Executive Life case.

News reports in France quoted him as indicating that an accord was “sur la bonne voie” (on the right track). The breakthrough apparently came when French businessman, Fran├žois Pinault convinced the U.S. Attorney’s office in L.A. to accept an additional $185 million to settle charges against him and his holding company, Artemis S.A. That offer – to be paid by Artemis – had earlier been rejected as insufficient.

It now appears that in exchange for dropping the criminal charges against Credit Lyonnais (CL), Altus Finance and others, including those against Pinault and his company, the French Government will pay $100 million in fines and $375 million in a blocked account to benefit policy holders. CL will pay a fine of $100 million, and French insurer MAAF, who had already agreed to settle charges against it, $10 million. The total cost: $770 million.

Still unclear is whether the settlement will include former CL boss Jean Peyrelevade, who has also been accused of participating, albeit after the fact, in CL’s takeover and cover-up efforts related to the takeover of the California-based life insurer in 1991.

Details of the settlement have not been revealed, but Raffarin indicated that a formal accord could be prepared early next week.

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