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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 the
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