Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 98

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          Credit Lyonnais’s indirect financing and ownership of film                  
          companies, including MGM.10                                                 
               B.  Consortium de Realisation                                          
               In 1995, Credit Lyonnais experienced a financial crisis.               
          Following the intervention of the French government, Credit                 
          Lyonnais announced a restructuring program that was intended to             
          shore up its balance sheet going forward.  Under the                        
          restructuring program, Credit Lyonnais’s troubled investments and           
          loans, including its loans to film companies such as MGM, were              
          effectively transferred into a wholly owned subsidiary,                     
          Consortium de Realisation (CDR).  CDR was set up for the purpose            
          of liquidating and maximizing recovery on Credit Lyonnais’s “bad            
          assets”.                                                                    
               When CDR was set up, the Credit Lyonnais employees who were            
          working on the troubled entertainment loans were given the option           
          of transferring to CDR to continue working on those loans or                
          taking other positions within Credit Lyonnais.  Rene-Claude                 
          Jouannet, a longtime employee of Credit Lyonnais, transferred to            
          CDR, where he served as CDR’s general counsel.11                            
                                                                                     


               10 The Credit Lyonnais group’s loans to MGM and eventual               
          ownership of MGM are described in detail infra.                             
               11 As we discuss infra, Mr. Jouannet played a significant              
          role in the transaction in which the Ackerman group acquired                
          SMHC.                                                                       





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