A French appeals court has ruled against an extension of the protection plan proposed by the owners of Paris skyscraper Coeur Defense. The 182,000 m[sup]2[/sup] complex, which was acquired by Lehman and Atemi for EUR 2.1 bn in July 2007, has been at the centre of a conflict between the owners and the debtholders since Hold, the special purpose vehicle controlling Coeur Defense, filed for court protection in September 2008.

A French appeals court has ruled against an extension of the protection plan proposed by the owners of Paris skyscraper Coeur Defense. The 182,000 m2 complex, which was acquired by Lehman and Atemi for EUR 2.1 bn in July 2007, has been at the centre of a conflict between the owners and the debtholders since Hold, the special purpose vehicle controlling Coeur Defense, filed for court protection in September 2008.

The protection plan granted owners a further two years until 2014 for the repayment of a CMBS vehicle worth a total of EUR 1.5 bn. The plan also allowed Lehman Brothers and Atemi to continue to manage Coeur Defense and collect rent until then.

As a result of the courts' new decision, creditors will have the right to the rental income of Coeur Defense and could seize the 182,000 m2 property in case owners don't meet payment obligations. 'The creditors can now ask for an anticipated reimbursement of the debt and if so, I will be forced to ask for suspension of payments', Guy de Boisgrollier, president of Hold, told French newspaper La Tribune.

Gilels Saint-Marc, lawyer for EuroTitrisation, the managing company of FCT Windermere, the securitisation vehicle, said that creditors will look to 'transform this legal victory into an economic success.' 'This means stopping the fall in value of Coeur Defense and ensuring that the management of this building allows to pay interests to the CMBS investors and to maximise the value of the asset in order to reimburse creditors at the maturity date.'

Coeur Defense, which is currently 20% vacant, has shed almost 50% of its value over the past two years.