Court blocks bond holder’s bid to seize Coeur Défense

Court ruling protects borrowers during debt restructuring of Paris tower

Perella Weinberg’s strategy to take control of Paris office tower complex Coeur Défense has hit another setback after a court ruling shifted the power from the bond holders back to the borrowers.

The owners of the 1.96m sq ft Paris office complex, a joint venture between Atemi and Lehman Brothers called Heart of La Défense, won an appeal decision by France’s highest court to remain under creditor protection while they restructure the debt secured against the asset.

Lehman provided a loan of €1.6bn for the purchase, which it securitised by issuing bonds through the Windermere X11 CMBS vehicle. The borrowers aim to extend the debt, which matures in 2012, by two years, but may no longer qualify for this.

Private equity real estate house Perella owns a vertical slice of the bonds worth around €275m, which it bought from Goldman Sachs at a substantial discount.

A source said the “value of the firm’s junior positions looks likely to be out of the money now, although at the price it paid it is unlikely to book a loss”.

The court ruling overturns  a decision made by the Paris Appeals Court last year that Heart of La Défense was not in deep enough financial trouble to warrant protection. As a result, restructuring talks will be resumed.