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Appeal Court Backs Coeur Defense Creditors

PARIS-Owner Hold cannot use safeguard protection, as it is not facing insurmountable difficulties in leasing the 1.9-million-square-foot complex.

By Allan Saunderson | Updated on March 16, 2010

PARIS-The Paris appeal court has ruled that creditors of the landmark Coeur Defense office development can receive rental income flows from the complex, the largest single office asset in Europe. The court also annulled the so-called “safeguard” procedure that gave Coeur Defense owner Hold protection from creditors.

Hold was granted the safeguard procedure by the Paris commercial court in November 2008 after a loan default, and subsequently won the court’s endorsement for a recovery plan which involved a postponement of its debt repayment from 2012 to 2014 and allowed it to continue managing the complex and collecting rent from tenants. But the creditors argued that the original financing agreement gave them the right to receive the rental payments under a so-called “Dailly” assignment in which the rental income was used to guarantee the debt.

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