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This is a real whopper. The French government backed out of a $600 million deal to settle the Executive Life fraud affair. I don't know what they are thinking! The US attorney has the French state/Credit Agricole/Credit Lyonnaise sooo over the barrel on this one and everybody knows it.
Bigger organizations and people than these have been brought low in this country with litigation and regulation with nary a tear. And this is going to go on an on. The indictments and subpoenas are going to flow like a river. The attorneys fees alone will run into the tens of millions of dollars. And then at the end of the day, the jury will find out that 200,000 Californians were defrauded and the jury will be baying for blood.
So why don't they just eat their humble pie and settle the damn thing?
Bigger organizations and people than these have been brought low in this country with litigation and regulation with nary a tear. And this is going to go on an on. The indictments and subpoenas are going to flow like a river. The attorneys fees alone will run into the tens of millions of dollars. And then at the end of the day, the jury will find out that 200,000 Californians were defrauded and the jury will be baying for blood.
So why don't they just eat their humble pie and settle the damn thing?
US set to publicise Executive Life charges
By Adrian Michaels in New York and Jo Johnson and Martin Arnold in Paris
Published: December 3 2003 20:55 | Last Updated: December 3 2003 20:55
US prosecutors were preparing on Wednesday to go public with criminal charges against prominent French financial institutions and individuals following the breakdown of talks in the Executive Life affair.
The US attorney's office in Los Angeles - a branch of the justice department - already has indictments under seal that allege wrongdoing in the takeover by Credit Lyonnais of Executive Life, a US insurer, in 1991.
This week's breakdown in talks looked irreparable, people on all sides said on Wednesday. Nonetheless they warned that the threat of reputational damage to France when the indictments are unsealed could yet bring the sides back into negotiations.
A deal involving a $585m (€484m) payment and limited recognition of guilt that the insurance bail-out was fraudulently arranged was scuppered because it did not provide legal protection for François Pinault, the retail magnate and friend of Jacques Chirac, French president.
The indictments will not be unsealed for at least a couple of weeks, people close to the talks said.
The French state has assumed responsibility for many of the bad debts and liabilities of the bank, which has since merged with Credit Agricole, and whose licence in the US could be revoked if it is indicted.
The likelihood that France will soon find itself in the dock before a Californian jury provoked dismay in Paris yesterday. The tone of French newspaper editorials has switched from anti-Americanism to criticism of Mr Chirac. His decision to scupper the plan has been judged risky.
Separately, the Executive Life affair is also putting strain on the relationship between Mr Pinault and Lyonnais. A senior Agricole executive said Mr Pinault had requested a fresh loan of "several tens of million euros" from Lyonnais to help cover his potential exposure to the Executive Life affair. However, the executive said Agricole was not keen to agree to the new loan. A spokesperson for Artemis, Mr Pinault's holding company, has denied he faces funding difficulties.
By Adrian Michaels in New York and Jo Johnson and Martin Arnold in Paris
Published: December 3 2003 20:55 | Last Updated: December 3 2003 20:55
US prosecutors were preparing on Wednesday to go public with criminal charges against prominent French financial institutions and individuals following the breakdown of talks in the Executive Life affair.
The US attorney's office in Los Angeles - a branch of the justice department - already has indictments under seal that allege wrongdoing in the takeover by Credit Lyonnais of Executive Life, a US insurer, in 1991.
This week's breakdown in talks looked irreparable, people on all sides said on Wednesday. Nonetheless they warned that the threat of reputational damage to France when the indictments are unsealed could yet bring the sides back into negotiations.
A deal involving a $585m (€484m) payment and limited recognition of guilt that the insurance bail-out was fraudulently arranged was scuppered because it did not provide legal protection for François Pinault, the retail magnate and friend of Jacques Chirac, French president.
The indictments will not be unsealed for at least a couple of weeks, people close to the talks said.
The French state has assumed responsibility for many of the bad debts and liabilities of the bank, which has since merged with Credit Agricole, and whose licence in the US could be revoked if it is indicted.
The likelihood that France will soon find itself in the dock before a Californian jury provoked dismay in Paris yesterday. The tone of French newspaper editorials has switched from anti-Americanism to criticism of Mr Chirac. His decision to scupper the plan has been judged risky.
Separately, the Executive Life affair is also putting strain on the relationship between Mr Pinault and Lyonnais. A senior Agricole executive said Mr Pinault had requested a fresh loan of "several tens of million euros" from Lyonnais to help cover his potential exposure to the Executive Life affair. However, the executive said Agricole was not keen to agree to the new loan. A spokesperson for Artemis, Mr Pinault's holding company, has denied he faces funding difficulties.
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