The Establishment Of Holco And Its Subsidiaries And The Allocation Of Assets
LexInter | June 25, 2003 | 0 Comments

The Establishment Of Holco And Its Subsidiaries And The Allocation Of Assets

1.- The establishment of Holco and its subsidiaries and the distribution of assets

As a preamble, a statement by Me Léonzi, speaking at the works council of April 29, 2002, can be quoted: “Today we must find dynamic arrangements to allow the creation of a real company with several poles of activity. , by compartmentalizing them to prevent one problem from one entity affecting the others. It is a management option that we claim. “

  1. a) Holco

Holco was registered in the trade and companies register on July 23, 2001. The company, headquartered in Paris and with a capital of 40,000 euros, is 99.99% owned by Mr. Corbet . Holco is the parent company of the operating company AOM-Air Liberté, baptized Air Lib in September 2001, and the other companies taken over on July 27, 2001.

The real estate assets of Holco must be detailed.

Today, the company only has a financial lease on a building located in Tours, according to Mr. Corbet. The leasing contract will end on June 30, 2003.

Regarding a building located in Rungis (former head office of AOM), Mr. Corbet indicated that the deeds of transfer had not yet been signed and that the court administrators were therefore still in charge of the file. They would have refused to cede the property to Mr. Corbet. The financial lease contract will expire on December 31, 2006. The judgment of the Commercial Court of Créteil dated July 27, 2001 indicates, with regard to the scope of the takeover, that the sale includes all tangible and intangible fixed assets attached to repossessed funds, in particular the “  rights to leases or leasing of premises belonging to third parties in which the repossessed [business] assets  are operated“. Consequently, the scope of the takeover did not include credit leases in which the business assets taken over were not used. The Rungis building would not, it seems, have to be included in the scope of the assets taken over.

Mr. Corbet’s statements do not cover the information provided by the Mazars and Guérard report of July 2002 on the financial situation of the Holco group. This report also mentions a leasing contract on the Rungis building. It is not indicated that the deeds of transfer concerning this last building were not signed although the report took care to indicate the operations not yet completed.

  1. b) French subsidiaries

SAS Holco having been granted the profit of the takeover, it remained to organize the often numerous subsidiaries in the airlines.

The takeover plan presented by Mr. Corbet explicitly provided for the possibility of substituting for Holco any entity created for the purposes of the takeover. However, on July 27, 2001, the commercial court failed to rule on this point, which was essential for the establishment of the company.

Ruling at the request of SAS Holco, on September 13, 2001, the Commercial Court of Créteil proceeded with a rectification granting the company Holco the benefit of ”  a substitution option for the benefit of any entity created for the needs of recovery subject to their control by the buyer under the conditions of articles 355-1 and 355-2 of the law of July 24, 1966 and in particular for the benefit of the companies Minerve Antilles Guyane SN, Hotavia Restauration Services SN, Air Liberté Technics and Société d AOM Air Liberté operation.  ”

This decision therefore authorizes the creation of subsidiaries that can replace SAS Holco. No restrictive condition is imposed, apart from the obligation that the subsidiaries be controlled by the buyer.

Due to the delays in drawing up the deeds of sale of the companies taken over, the Holco company had to sign on October 24, 2001 a lease management contract for the various businesses (for one franc per month and per business). This contract took effect, retroactively, from August 1, 2001. The deeds of transfer were not drawn up until December 19 and 21, 2001.

The organization chart of the company evolved considerably, revealing in the end 11 subsidiaries. Holco was the only structure existing before the takeover. On August 24, 2001, the operating company AOM Air Liberté, known as Air Lib from September 20, 2001, was registered in the trade and companies register. Shortly afterwards, the companies Air Lib Technics (August 30, 2001), Hotavia Restauration Services (also August 30, 2001) and Minerve Antilles Guyane (September 17, 2001) were registered. These companies bought the business assets of their pre-existing companies. Thus, Air Lib Technics first took over the business assets of Air Liberté Industrie and TAT European Airlines, then, secondly, that of SR Technics France. Hotavia Restauration Services and Minerve Antilles Guyane have,

In addition, as part of the takeover, Holco also became the 60% owner of the shares in the Alyzair companies (created in 1995); 100% Logitair (created in 1992); SAAS (Ground Assistance Aircraft Service, created in 1996) at 50.04%; SAP (Runway assistance service, created in 1992) at 51% and Air Liberté Finances (created in 1992) at 100%. According to the information collected, it is the holdings of the companies most directly linked to the activity and of real economic interest which have been taken over. Some subsidiaries, whose links with the activity of the airline seemed too weak, have been dismissed. However, the members of the Mazars and Guérard cabinet interviewed indicated that the Alyzair company no longer had any

Following these transactions, Holco comprised nine subsidiaries.

Subsequently, when the Air Lib Express product was developed, the operating company AOM-Air Liberté, known as Air Lib, saw its activities split between two entities: the Air Lib Express company, registered on October 1, 2002, and the operating company Air Lib, registered on December 2, 2002. These two companies are 100% subsidiaries of the operating company AOM-Air Liberté.

  1. c) Foreign subsidiaries

The foreign subsidiaries were created later than the first French subsidiaries.

  • Holco Lux

Holco Lux, wholly owned by Holco, was entered in the Luxembourg Trade and Companies Register on December 28, 2001. It benefited from funds paid by Swissair to Holco in the amount of five million euros (including one million euros). euros for its capital endowment and four million euros contributed to its current account). According to the Mazars and Guérard report submitted to the interministerial committee for industrial restructuring on July 15, 2002, the purpose of the company Holco Lux is to be ”  the host structure for the group’s external growth operations in related fields of l ‘air “. This indeterminate object did not fail to raise some concerns among the employees of the airline company who were not quickly informed of the existence of this subsidiary. Mr. Fourier, CGT union delegate, declared: ”  We discovered that this subsidiary was intended, I quote: ”  to take holdings in any form whatsoever in Luxembourg or foreign companies or companies in Luxembourg  “. It’s a bit surprising, especially in the context of a business that was still going very badly. I remind you that, in December 2001, that is to say 5 months after the takeover, Air Lib was already putting on the works council’s agenda: ”  possible bankruptcy  “.  ” He added: Holco Lux took a stake in a company called IP Bus which, it seems, was intended for pilot training. This was also the subject of a question in the works council by my colleague Sylvie Guillou-Faure. When we learned of the possibility for Holco Lux to do pilot training, Sylvie Guillou-Faure asked the question, saying:   If we understand correctly, you could, at some point, close the airline and keep your pilot training subsidiary which can be used by any other airline  ”. Indeed, the management response had been clear. They had said: ” Yes, legally, it is quite possible that at a given moment, we keep only this subsidiary or this or that subsidiary and that the airline company has disappeared  ”. For this reason, from the start, we suspected them of wanting to put money if not, in any case activity aside to ensure a future for this holding beyond the airline.  ”

According to the aforementioned report, an investment project in the pilot training institute was not retained. On the other hand, Holco Lux would have loaned 614,000 euros to a Newco company which aims to invest ”  in companies with strong development  “. An IP Bus project would have been developed in particular, which consists, this time according to an information note from the firm Secaphi-Alpha on the accounts of Holco dated March 5, 2003 and intended for the works council, to ”  develop distance training in companies through the use of satellite transmissions  ”for pilots. This element is not enlightening on the exact activities of Holco Lux. Furthermore, what was the use made of the four millionMr. Corbet did not wish to answer this question during his hearing, taking refuge behind business secrecy:

“  Mr. Jean-Charles CORBET:  As far as Holco Lux is concerned, it is somewhat the same approach: it is a participation structure. It was planned to eventually allow the subsidiary formation of training structures for Air Lib flight crews.

Mr. Rapporteur:  You say it was intended, but did it do so? What use did you make of the Holco Lux subsidiary after having endowed it with five million euros?

Mr. Jean-Charles CORBET:  That’s what she started to do, Mr. Rapporteur.

Mr. Rapporteur:  Can you be more specific?

Mr. Jean-Charles CORBET:  No.

Mr. Rapporteur:  Why?

Mr. Jean-Charles CORBET:  I will write it to you.

Mr. Rapporteur:  Why did you endow it with five million euros?

Mr. Jean-Charles CORBET:  And why not?

Mr. Rapporteur:  The question is: why one? Why not two or ten?

Mr. Jean-Charles CORBET: Because five! It is a management trade-off that cannot be discussed, Mr. de Courson. I am amazed at your question. You are someone who is used to financial structures, the business world. This question, I do not understand it.

Mr. Rapporteur:  This is the first time that a witness has answered the question put to him in this way. Why endow a branch with five million dollars for a purpose which, according to what you indicated, was not realized since your initial idea was the training of pilots? When I ask you the question “Why five million?” Why not a million, why not twenty million? », You tell me that it is a management response which belongs only to you and that you do not have to respond to the commission. This answer is strange.

Mr. Jean-Charles CORBET:  That is not what I am telling you. I tell you: it’s five. I don’t know why it’s not one or six or twenty. First the capitalization was one million ….

Mr. Rapporteur:  … one plus four!

Mr. Jean-Charles CORBET:  One plus four of own funds which are in a Holco Lux current account. But you know that between the society above and the society below, nothing is irreversible. So it was five made up this way: cap one million, current account four million.

Mr. Rapporteur:  What did you do with these five million in the branch? You were the president of Holco Lux!

Mr. Jean-Charles CORBET:  Yes.

Mr. Rapporteur:  So you know what happened as chairman of Holco Lux? What did you do with the five million?

Mr. Jean-Charles CORBET:  I remind you that we are in a public framework and that I have to respect the confidential framework of business secrecy. I will answer you in writing.

Mr. Rapporteur:  You were the sole shareholder, Mr. Corbet, of Holco Lux?

Mr. Jean-Charles CORBET:  No. Holco was the sole shareholder, not Jean-Charles Corbet.

Mr. Rapporteur:  But you are the sole owner of the parent company?

Mr. Jean-Charles CORBET:  I am the sole shareholder of SAS Holco; Holco was the sole shareholder of Holco Lux. 

It should be recalled here what was the object of the Swissair contribution, as it was defined by the Commercial Court of Créteil in its judgment dated July 27, 2001: “  The Swissair group agrees to the buyer named above a voluntary contribution of 1.3 billion francs, including where applicable participatory loans, to finance the restructuring, activity and takeover of the assets covered by this disposal plan. 

Do the five million euros paid to Holco Lux and withdrawn from Swissair funds comply with the conditions set by the court? Is their purpose to finance restructuring, activity and asset recovery? It is permissible to doubt it.

  • Mermoz

A second subsidiary, Mermoz, was created on October 29, 2001.

Mermoz, wholly owned by Holco, was the host structure for part of the fleet from August 1, 2001 (the deeds of sale of the aircraft were signed on December 17, 2001 with retroactive effect). Eleven planes were sold to it, including four FOKKER 28-2000 in the process of being sold or in spare parts. Seven planes were therefore left: one ATR 42-300, five DC 10-30 and one MD 83.

On the relocation of the company’s planes abroad for tax reasons, it seems, Mr. Rochet, former manager of AOM-Air Liberté, expressed himself in these terms: “  We can blame a lot of things to the previous directions in terms of management, commercial option, social choices, but I can attest that at no time the assets, essentially constituted around AOM first version, of which you have made the history, did not come out of the group. When I say the group, they could very well be positioned around AOM participations, AOM airline, Air Liberté, Air Liberté Finances, but they remained within the perimeter and in France.  ”

Asked about the question of the rental of planes by subsidiaries to an airline of the same group, the experts of the firm KMPG consulting France underlined the common character of this type of organization: ”  the fact that there are people who buying planes and leasing them to operating companies is common. Air France maintenance did the same. If you look at the number of companies positioned in Luxembourg and which position their planes there, it’s quite classic.  ”

Mr. Spinetta, Chairman and CEO of Air France, also indicated that this practice is widespread: “  in itself, it does not appear to me to be a scandalous practice. We also do this with the authorization of the General Tax Directorate, which is informed. Decisions are taken by Air France’s board of directors on the positive advice of the general tax department. (…) Of course, we have a few planes housed in structures in Ireland or elsewhere, but in conditions of transparency and knowledge of the supervision which are total. 

In principle, Mermoz leased these planes to Air Lib, but Mr. Bachelet, chairman of the company’s management board until December 31, 2001, explained that he had always refused to allow Air Lib to pay for the use of these planes.

Mermoz also benefited from Swissair funds, but in greater proportions than Holco Lux. The company was endowed with a capital of 12.28 million euros (Holco’s accounts show the slightly lower sum of 12.196 million euros) fully paid up on January 24, 2002, according to a summary note on the creation of the companies Mermoz and Mermoz Aviation Ireland provided by Me Léonzi.

According to the aforementioned note, this capital was ”  intended to cover the maintenance costs linked to the use of the planes before the takeover insofar as the Bureau Francis Lefebvre firm recommended that only the costs linked to the use after the takeover are left at the expense of the user, Air Lib.  ”

According to the Mazars and Guérard report, the division between maintenance at the expense of Air Lib and that at the expense of Mermoz did not appear to be so clear since Air Lib seemed to have reconstituted part of the maintenance reserves owed by Mermoz. (the amount is estimated between three and four million euros). The experts from Mazars and Guérard interviewed indicated that the justification for the capitalization given to them was that of maintenance costs. The calculation of the sum was not verified by the firm because it did not fall within the scope of its mission for the CIRI.

“  Mr. Rapporteur  : Insofar as, in your mission, there was an attempt to reflect on the consolidated accounts, one of the tasks of an auditor is to check that the provisions are correctly calculated.

Mr. Pierre SARDET  : It was not an audit, but we thought it was desirable to provide this information to the department, without being able to qualify it precisely. If, on the other hand, you ask me, as a technician, if we would have adopted the same accounting treatment, I am not sure. 

Several points should be emphasized. The note from Sécaphi-Alpha dated March 5, 2003 intended for the works council indicated that uncertainties weighed on the use of the sums paid to Mermoz.

The amount of twelve million euros seemed disproportionate to those interviewed. Mr. Rochet commented on the amount: “  Holco received planes net of debt for 1 franc, but without the corresponding provisions. I am therefore not shocked, from an accounting point of view, that we are gradually recreating sufficient provisions to go to the end of the flight hours still possible and then pay for the maintenance work. I have orders of magnitude in mind, but I am prepared to study the question more precisely. In any case, I find it hard to see, for the fleet, which was indeed of the order of magnitude that you mentioned, how we can recreate 12 million provisions. It seems unrealistic to me.

Mr. Rapporteur  : Does that seem excessive to you?

Mr. Marc ROCHET  : Oh yes! In a minimum ratio of 1 to 2, or even 1 to 3.  ”

While it is normal for an owner to set aside the sums necessary for aircraft maintenance, in the case of a company in great difficulty like Air Lib, it would have been preferable to gradually build up the provisions. There was no justification for advancing such sums as early as October 2001, a few weeks after September 11, 2001.

Asked about the capitalization of Mermoz, Mr. Corbet once again felt that he could not answer the commission of inquiry:

”  Mr. Rapporteur  : Could you explain to us why – you have provided us with explanations which seem incomplete to us – you have endowed the cooperative subsidiary Mermoz with 12.2 million euros?”

Mr. Jean-Charles CORBET:  Again, I believe that was explained to Mazars. I invite you to reread the Mazars report and you will have the answer. 

If the capitalization of Mermoz to the tune of 12.196 million euros was linked to aircraft maintenance costs, how can we explain in this case that Mermoz paid, on behalf of Holco, 9.14 million euros to a Plegler firm? and Blach, as shown in Holco’s general ledger for the fiscal year ended March 31, 2002. The payment of this amount appears in the accounts as of March 31, 2002, the fiscal year-end date but this registration would only constitute a posteriori regularization accounting entries. According to the information provided to the Rapporteur, this sum had been paid previously. The exact date could not be determined. However, the Mazars et Guérard firm, when questioned, indicated that it was not aware of this financial movement in July 2002.

A new justification for the contribution of 12.196 million euros to Mermoz therefore appears, which would be an invoice from a law firm. When questioned by the commission of inquiry, Me Léonzi said he was aware of this contract: ”  I saw the contract which is a contract for the payment of fixed fees, with a commitment which must survive the possible misfortunes of all or part. of Holco-Air Lib structures. “The payment of a provision on a follow-up is, according to him, unusual, but the amount committed (9.14 million euros) to recover a debt of 60 million euros did not”  pose any difficulties to him. particular “. The statutory auditors have also validated the accounts. The fact that it is a subsidiary of Holco which advances the money on behalf of its parent company is, according to Me Léonzi, a quite usual practice. It should also be noted that the Interministerial Committee for Industrial Restructuring (CIRI) had been informed by the leaders of Holco of the destination of Mermoz’s assets: “  Mermoz held around fifteen million euros in assets. I quote to you, under the control of Philippe Leroy, the very terms of the directors of Holco SAS and their advisers: these sums are intended to finance the litigation against Swissair and to seek them until the end of the Land, ”said Jean-Baptiste Massignon, secretary general of CIRI.

It was therefore for the lawyers to be remunerated for all the pending lawsuits against Swissair. However, these lawsuits also constitute a good part of the activity of the cabinet of Me Léonzi, which does not intervene free of charge in this case, as he explained: ”  I could provide you with a certain number of details on this claim since my firm coordinates the various actions across Europe on the recovery of the 60 million euros contractually owed, regardless of the compensation claimed from all the legal entities that made up the Swissair group.  ”

Me Léonzi has indicated how he would likely be remunerated for all of his actions against Swissair (employing three employees of his firm and costing around 1.5 million francs per month in legal fees throughout Europe. , according to his statements): “  President Corbet will use the Plegler mechanism and Holco will be paid by Plegler the amount corresponding to the remuneration of the invoices.

Mr. Rapporteur  : You will therefore be remunerated via the 9.14 million euros.

Mr. Yves LEONZI: I will be paid by Holco, because I will not accept payment from anyone else. 

One can only underline the extremely high nature of the sum in question and, legitimately, wonder whether this sum was paid or provisioned in its entirety even before the claim on Swissair was recovered (the procedures are still pending). in progress today). Mr. Corbet gave few details to the commission of inquiry:

“  Mr. Rapporteur:  We discovered that the cooperative subsidiary Mermoz, your subsidiary in Holland, paid 9.1 million euros on behalf of Holco, on behalf of the holding company, to a Swiss law firm, Plegler and Blach, responsible for this firm to follow the recovery file for the unpaid contribution by Swissair which was in the order of 38 million euros, since they were to pay you 1.3 billion and they have paid 1.05 billion.

Mr. Jean-Charles CORBET: Swissair’s debt is 60 million euros, sir.

Mr. Rapporteur:  Yes, but there were two parts: the part they had to pay in cash to the holding company was 1.3 billion according to the decision of the Commercial Court of Créteil and you received 1, 05 billion. This makes a difference of 250 million francs, or 38 million euros.

Can you confirm to us that you have paid these 9.1 million euros? Could you explain to us how you can pay a law firm located in Switzerland, 9.1 million euros by paying the fees in advance without any profit-sharing clause. That is, if the cabinet only managed to recover zero, they would still have that 9.1 million, and if they managed to recover ten million, you would have paid that much to recover.

Why did you sign this contract? Could you give the commission this contract which we requested and which we have not yet received.

Mr. Jean-Charles CORBET: First of all, what you just said is wrong: it is not a Swiss cabinet.

Mr. Rapporteur:  You have transferred it to Switzerland from what we have been told.

Mr. Jean-Charles CORBET: You see that you are being told inaccurate things.

Mr. Rapporteur:  We are here precisely for you to explain to us.

Mr. Jean-Charles CORBET:  I am telling you that we are in a procedure against the Swiss, an extremely complex procedure. There is absolutely no question of me revealing my strategy publicly. These elements of which you speak are today with a legal expert who will forward them to the Commercial Court of Paris. As soon as his report is made, I invite you to ask him.

Mr. Rapporteur:  This is not the debate, Mr. Chairman.

Mr. Jean-Charles CORBET:  But that’s my answer.

Mr. Rapporteur: The debate is that I found this amount in your accounts. And so, I ask you the question: your subsidiary Mermoz paid 9.1 million. Whose ? There is still a payment! I found it. I was told that this was paid to a firm called Plegler and Blach.

Can you tell the committee what this cabinet is and what is the basis for the payment of 9.1 million euros. We are at the beginning of 2002, when you asked for 30.5 million from the State and where you hope to have in addition, via the fiscal GIE, roughly also 30 million. Can you explain this to us?

Mr. Jean-Charles CORBET: I will answer you in writing. Very schematically, it is a complete life insurance policy that allows us today to continue to sue the Swiss all over the world. Today we have proceedings against the Swiss in Poland, Belgium, Italy, France, Luxembourg.

It is a provision that allows us to be sure that whatever happens, we will complete the procedure.

Mr. Rapporteur:  You make the subsidiary pay this amount. Why was this amount paid by the branch?

Mr. Jean-Charles CORBET:  No, I cannot explain it to you.

Mr. Rapporteur:  Why is it not the holding company that paid it?

Mr. Jean-Charles CORBET: I cannot explain it to you, I will explain it to you in writing.

Mr. President:  You understand, Mr. Corbet, that whatever explanations you give or do not give, the question of the commission is to know why, when you ask for a 30 million loan from the State, you honor an invoice of 9.1 million euros to a firm of which you do not want to give the name and for reasons that you do not want to say.

We’ll see what you get back to us later. But understand that we are asking questions.

Mr. Jean-Charles CORBET: I understand that you are wondering. On January 5 – I will check – in the debate we had with the CIRI that day, in the arbitration of the 5 million, we indicated to the CIRI that we were keeping a sum in reserve to pursue the Swiss to the end. of the world.

Mr. Rapporteur:  Did you give the amount to the CIRI?

Mr. Jean-Charles CORBET: Yes. I told CIRI that this would represent around 10 million euros.

Mr. Rapporteur:  Did you have a written agreement?

Mr. Jean-Charles CORBET: I didn’t have to have a written agreement from CIRI! The CIRI arbitrated and imposed on us the descent of 5 million euros in blocked current account.

Mr. Rapporteur:  That does not explain why, at the same time, you paid 9 million. We have not found any trace of this. I would therefore be grateful if you could confirm to us in writing that you informed the CIRI – you told us yes – that you indicated the amount and to whom you paid it and for what purpose?

Mr. Jean-Charles CORBET: I will tell you all that.

Mr. Rapporteur:  Last question: who is this cabinet?

Mr. Jean-Charles CORBET: I will tell you in writing.

Mr. Rapporteur:  Because you don’t know?

Mr. Jean-Charles CORBET: Of course it is, but I am telling you that these are confidential matters when we are in a public debate. Today this is part of a judicial inquiry to which we have disclosed all of this. I will let you know and eventually give you the report.  “ 14

It should once again be recalled that the Commercial Court of Créteil had specified in its judgment on the takeover that the purpose of the contribution paid by Swissair was to finance the restructuring, the activity and the takeover of the assets. Once again, it must be noted that the actual destination of the funds differs from that laid down by the court.

The total funds paid to Holco Lux and Mermoz out of the Swissair contribution reached 15.3 million euros, taking into account subsequent cash flows from subsidiaries to Holco. On March 1, 2002, Mermoz donated one million euros to Holco. One of the conditions for the payment of the second tranche of the FDES loan which was granted to Air Lib in January 2002 was in fact that Holco would send cash “down” to Air Lib (5 million euros). Holco therefore returned part of the funds available to its foreign subsidiaries. On January 6, 2003, Mermoz again made a transfer in the amount of 700,000 euros in favor of Holco. Following the liquidation of Air Lib on February 17, 2003, Holco Lux paid 200,000 euros to Holco.

  • Mermoz Aviation Ireland

A subsidiary of Mermoz, Mermoz Aviation Ireland was then created from a company incorporated under Irish law inactive since its formation in 2000. According to the aforementioned note from Me Léonzi, the shares of this company were transferred to Mermoz on 28 May 2002 then the name of the company changed to become Mermoz Aviation Ireland and, on December 20, 2002, the latter benefited from a capital contribution from Mermoz comprising:

– aircraft ownership and

– the benefit of the lease agreements of aircraft since 1 st  August 2001.

The planes therefore became the property of Mermoz Aviation Ireland which is itself 100% owned by Mermoz.

  1. d) The holdings of the Holco holding company

The holdings of the Holco holding company were as follows before the liquidation of Air Lib on February 17, 2003:


Mermoz Aviation


(fleet management)

SE AOM-Air Freedom

(“Air Lib”)

(air Transport)

15 million euros

* Antilles and Reunion

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