France Agrees to $770 Million Executive Life Settlement; Individuals Excluded

December 16, 2003

The French government and Credit Lyonnais (CL) have agreed to accept a settlement in the Executive Life case that will cost $770 million, but the deal excludes individuals named in the criminal case, currently pending in Los Angeles.

The Consortium de Realisation (CDR) a government group set up to handle the bank’s debts, wil pay $475 million, of which $375 million will be held in a fund pending the outcome of civil cases against CL and others involved in the 1991 takeover of Executive. French financier Fran├žois Pinault has agreed to pay a total of $185 million through his holding company Artemis S.A., of which $110 million will be held in the fund. CL will pay $100 million in fines, and French insurer MAAF has already settled charges against it for $10 million.

Paris did not get what it has been demanding, a global settlement of all charges in exchange for the payments. The companies involved, notably CL, which now will presumably keep its U.S. banking license, are no longer subject to the criminal investigation, providing the agreement is ratified by a federal judge.

But the individuals named in the indictments, including Pinault, Jean Peyrelevade, ex-CL CEO, and Dominque Bazy, a former CL director, are still under investigation.

Nor has a settlement of the civil cases has been concluded. The California Insurance Department is seeking some $2.5 billion from CDR, CL and Artemis. That case may go to trial early next year.

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