- 13 - March 1985 it declined to provide the required annual certification to the French government that it would support the capital of its subsidiary. As a result, under French law the subsidiary would automatically liquidate after 2 years. When the letter of credit furnished to Banque de la Cite expired in July 1985, WFGI did not renew it. There were a number of reasons why WFGI chose not to terminate the subsidiary, even at the risk of continued losses. During and after FY 1984 the officers of WFGI were actively soliciting offers for the purchase of the French subsidiary, either alone or as a part of the entire Wally Findlay Group. They evidently continued to believe that the French subsidiary contributed to the market value of the group, and they received expressions of interest in the French subsidiary from some prospective buyers. It would not have made sense to liquidate the subsidiary so long as selling it as a going concern was a realistic possibility. On the other hand, if the subsidiary were to be liquidated, the amount that could be realized from assignment of the premium lease immediately after FY 1984 would probably be less than its potential value. In the fall of 1984 the lease was in the third trimester of its second 9-year term. Whoever held the lease thereafter would have to renegotiate it on or before June 30, 1987, when the term expired. WFGI had been advised by French counsel that a third party who acquired thePage: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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