'Progress' but no deal yet in Executive Life talks

13th August 2004, Comments 0 comments

LOS ANGELES, Aug 12 (AFP) - French and US officials made progress but failed to strike a deal during secret talks aimed at settling a civil lawsuit over the allegedly fraudulent purchase of insurer Executive Life by a French bank, sources said Thursday.

LOS ANGELES, Aug 12 (AFP) - French and US officials made progress but failed to strike a deal during secret talks aimed at settling a civil lawsuit over the allegedly fraudulent purchase of insurer Executive Life by a French bank, sources said Thursday.  

The talks were aimed at averting a messy civil trial due to start in February next year over the allegedly illegal acquisition of Californian insurer Executive Life by French bank Credit Lyonnais in the early 1990s.  

Sources close to the two-day negotiations held in Los Angeles told AFP that the second round of talks went far better than a failed initial round in San Francisco last March.  

But the two sides remained far apart on a dollar amount for the proposed settlement to the lawsuit, which seeks more than USD 3 billion in damages and restitutions from French parties to the deal, the sources said.  

"We didn't settle," one source said of the talks.  

"We spent two full days working very hard. We made some progress," he said adding that further talks were likely.  

"There is still a significant gap between what the defendants are willing to pay and what the plaintiffs are willing to accept, but we made some progress."  

French officials and US prosecutors stuck a plea deal in December to settle criminal charges in the case under which the French parties agreed to pay a total of USD 771.75 million as part of one of the biggest criminal settlement in US history.  

But California's insurance department is still pursuing its civil suit, seeking more than USD 3 billion in restitution and damages for Executive Life policy holders who were allegedly harmed by the deal.  

Gary Fontana, a lawyer for the California Insurance Commissioner who represents policy holders, is seeking USD 2.4 billion from the French state and USD 1 billion from Artemis - a French firm that ended up acquiring Executive Life's junk bond portfolio - in the civil case.  

French parties involved in the deal include Credit Lyonnais, Artemis, its owner, tycoon Francois Pinault, and the CDR, the French government body that now manages the assets of the formerly state-owned Credit Lyonnais.  

Civil proceedings were launched in 1998 on behalf of 330,000 Executive Life policy holders he said were harmed by illegal acquisition of the firm.  

At the time of the acquisition, banks were barred from owning more than 25 percent of insurance companies and it was also illegal for entities controlled by foreign governments to own a California insurer.  

Formerly state-owned Credit Lyonnais was accused of fraudulently gathering a consortium of French firms to carry out the transaction on its behalf and of profiting from the transaction.  

The criminal case raised tensions between France and the United States at a time when relations were already strained by differences over the war in Iraq.

 

© AFP

 

Subject: French news

 

 

 

 

 

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