Creation consortium

See also: CDR

The Creation consortium (CDR) is a structure charged to manage the liability of the Crédit Lyonnais after the quasi-bankruptcy of the bank in 1993.

Created in 1995, CDR is a structure of quartering and defeasance which took again 28,3 billion euros of credits of the Crédit Lyonnais Group. The principle consisted in separating the credits and credits compromised from the part considered as healthy. The doubtful debts were placed in a subsidiary company, CDR, the latter having been then yielded to an establishment of State, EPFR, created for the occasion. At the conclusion of this operation, the Crédit Lyonnais are found thinned down but with a cleansed wallet. On its side, the State recovers a whole of credits and credits posing problem. Contrary to a spread idea, all its credits are not rotted , some are even of great value but pose, for example, of the problems of liquidity.

CDR fits délibremment in an optics pertaining to liquidation, i.e. which the purpose of it is to balance its wallet as fast as possible. For the credits, it is a question of trying to obtain refunding under the most favorable possible conditions from it, even if that materializes a loss compared to the facial value. For the credits, it is a question of yielding them under the best conditions. Taking into account the nature even of the initial wallet, CDR could only post losses, which were guaranteed by the EPFR, therefore indirectly by the French State.

Wallet

The wallet of CDR included/understood:

the principal industrial participations of the Group Crédit Lyonnais (Adidas, Executive Life, participations in the holdings of François Pinault (Artémis), Vincent Bolloré etc), the majority having been acquired within the framework of the policy of Bank-Industry, an strategic axis for the Crédit Lyonnais lasting the Nineties,
the loans granted to various cinematographic companies (mainly resulting from CLBN, subsidiary Dutchwoman of the Crédit Lyonnais, of which financing of the MGM by Paretti nebula),
the participations in various financial institutions (Altus Finances, Banque Colbert , SDBO etc),
of many credits and credits real,

Legal structure

Name " CDR" indicate in fact a group of companies organized around a holding ( CDR SAS ) and subsidiary companies:

CDR Credits (made up starting from SDBO),
CDR Participations (in the past Clinvest),
CDR Real estate,
CDR Undertaken,
CDR Finances

The no protest clause to better fortune

As of the creation of CDR, it was clear that the Crédit Lyonnais cleansed by the insulation of hearths important of losses would release from the benefit in the years to come. The creation of CDR was supplied with a clause known as of return to mailleure fortune according to which, when the situation of the Crédit Lyonnais would have become favorable, i.e. when the bank joins again with the benefit, part of those would go to CDR and thus would reduce the burden of the debt with load of the State. Result of a formula, the share reserved for CDR was approximately 30% of these future benefit and this until 2014.

In 1998, the Crédit Lyonnais repurchased this clause, which means that this one was cancelled, and that exchanges some the share of the Crédit Lyonnais held by the French State passed from 81,75% to 89,76%. This operation replaces a random amount (a share of the benefit to come, therefore unknown) by a definite amount (8% of the capital of the bank). The declared goal of this operation is to facilitate the privatization of the bank, the clause of indefinite amount being regarded as likely to undervaluing the bank share and thus indirectly the value which the State could withdraw. Nevertheless, that seals the deficit of the CDR which cannot consequently any more hope to profit from the future profits only it has concurru to make possible…

Controversies

The conditions of transfer of some of the credits gave place to controversy, in particular:

the sale of the participation in Artémis, holding of François Pinault, resold in this same François Pinault, for a price judged by some in on this side its value, while one says the business man close to Jacques Chirac, then President of the Republic,
the management of the business Executive Life, which showed the judgment of CDR to pour 700 million dollars,

End of CDR

CDR ceased existing at the end of 2006 and the last credits (approximately 50 million Euros) remainder were taken again by the Caisse of the Deposits. The loss on the transferred credits is estimated at approximately 16 billion Euros.

Direction

CDR, successively, was directed by:

Michel Rouger, former president of the Bankruptcy court of Paris,
Raymond Levy, former chairman of Renault,
Jean-Pierre Aubert, which directed CIC previously, last president of CDR, until the stop of the structure.

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