- 40 -
Lyonnais.24 Because the debt that New MGM owed Credit Lyonnais
($378,748,588.93) exceeded the New MGM sale proceeds that Credit
Lyonnais was to receive ($298,835,633.58), New MGM still owed
Credit Lyonnais $79,912,955.34. On October 9, 1996, Credit
Lyonnais, MGM Group Holdings, and New MGM executed a debt release
and assumption agreement releasing New MGM from its obligations
on the remaining $79,912,955.34 of principal owed to Credit
Lyonnais under the working capital agreement and providing that
MGM Group Holdings assumed this remaining $79,912,955.34 of
indebtedness (the $79 million receivable). MGM Group Holdings
(and its successor SMHC) never executed a note for the
$79,912,955.34 of indebtedness referred to in the debt release
and assumption agreement.
F. Subparticipation Agreement
On September 25, 1996, CDR and Credit Lyonnais entered into
a subparticipation agreement concerning the working capital
agreement. Under this agreement, CDR agreed to take a 100-
percent subparticipation in the working capital agreement,
assuming all risks connected to that loan.
On October 11, 1996, Credit Lyonnais sent a letter to CDR
referencing the $79,912,955.34 excess debt from the New MGM sale
and stating: “Pursuant to your agreement of October 1, 1996, we
24 Generale Bank (CLBN’s successor) was to be paid
$611,064,366.42 (which included accrued interest) for the amounts
that New MGM owed under the CLBN term loan.
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