- 14 -
lease from the French subsidiary in its third trimester would not
be able to renew on terms as favorable as the French subsidiary
itself could expect. Consequently, if the subsidiary attempted
to assign the lease before renegotiating it, no assignee would be
willing to pay as much for the lease as the opportunity cost to
the Wally Findlay Group of surrendering it. Another reason to
delay any assignment of the lease was that the French subsidiary
was involved in a dispute over the rights to certain areas in the
Avenue Gabriel building. Another tenant was using the disputed
areas for its restaurant. The results of an investigation by a
court-appointed expert in 1983 had supported the French
subsidiary's claim and prospects for regaining possession were
good, but until the litigation was concluded or settled the
marketability of the lease was impaired.
By the end of FY 1987 the officers of WFGI had not found a
buyer for the group as a whole or for the French subsidiary
separately. The subsidiary renewed the lease for a third term
and then disposed of it. In a complex multiparty transaction,
two-thirds of the premises were assigned by the subsidiary to a
Frenchman named Mr. Leadouze, and the other one-third was
assigned to WFGI. Mr. Leadouze paid FF 1.3 million for the
portion of the leasehold that he received. WFGI acquired its
portion of the leasehold at a cost of $253,461. The French
subsidiary ceased operations during FY 1987, a liquidator was
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011