As a reminder, the Cœur Défense building (the second largest business center in Europe with 180,000 sq.m.) was acquired in June 2007 by HOLD (acronym of Heart Of La Défense) for 2.1 billion euros. This purchase price was funded through equity funds and shareholder loans up to 500 million euros, the balance being financed through a mortgage loan of 1.6 billion euros. HOLD is held by a Luxembourg company, Dame Luxembourg, which itself is held by real estate funds initially controlled by Lehman Brothers.

The mortgage loan was securitized in August 2007 to a French securitization fund, Windermere XII FCT, the bonds of which are held by major French and international institutional investors. The French securitization fund is legally managed and represented by the management company EuroTitrisation.

In September 2008, following the bankruptcy of Lehman Brothers, also the hedging counterpart of an interest rate cap, HOLD was under the contractual obligation to subscribe to a new cap with a new eligible hedging counterpart. Considering that it was not in a situation to subscribe to such a new cap given the financial crisis of 2008, HOLD decided to apply for safeguard proceedings (the French equivalent of the US Chapter 11) in November 2008. Dame Luxembourg, although a Luxembourg incorporated company, also applied for safeguard proceedings in November 2008. By applying for safeguard, HOLD and Dame Luxembourg were neutralizing several guarantees and securing the position of the French securitization fund. Such French securitization fund was under the obligation to defend itself in order to protect the interest of its investors.

After over four years of legal proceedings and 16 judicial decisions handed down successively by the Commercial Court of Paris, the Court of Appeal of Paris and the French Supreme Court, the Court of Appeal of Versailles as court of dismissal designated by the French Supreme Court, rendered on 28 February two major decisions in the "Cœur Défense" case, which recognize the rights of the French securitization fund.

First, the Court of Appeal of Versailles confirms the judgment rendered by the Commercial Court of Paris on 19 October 2009, which recognized that the Dailly assignments of the future rents held by the French securitization fund were fully valid and enforceable against the safeguard proceedings opened to the benefit of HOLD and its parent, Dame Luxembourg.

Second, the Court of Appeal of Versailles recognizes the admissibility of the voluntary intervention of the French securitization fund against the judgment rendered by the Commercial Court of Paris on 9 September 2009, which imposed a safeguard plan on the French securitization fund violating several legal mandatory provisions protecting the rights of the creditors. The Court also invalidates such judgment rendered by the Commercial Court of Paris on 9 September 2009 and fixes new terms for the safeguard plan.

The conditions for exiting this transaction, regarding the rights of the creditors, have been significantly improved by the two decisions of the Court of Appeal of Versailles.

EuroTitrisation was advised by French law firm Gide Loyrette Nouel (Gilles Saint Marc).