SFFAW

"In a brief note of barely five sheets, he recommends blowing up the Willot lock by putting the SFFAW into judicial liquidation. In this case, they will have nothing more to say, their companies will be sold to the highest bidder and the proceeds from the sale will be used to repay creditors. At the beginning of summer, the Willots panicked. They risk losing everything. They need to react without delay. The trick would be to find a third party, approved by the government, to whom they could sell part of their ownership rights. Someone who could achieve the consensus of the public authorities, bankers and unions in his name. So, in this month of July, the Willots consult."

"The Willots are suspicious. But a friendly investment banker, Alain Clarou, urges them to accept. Deputy CEO of Louis Dreyfus Bank, he has the same problem as Worms & Cie: in the spring of 1984, he had some of his clients buy packages of SFFAW shares and panics at the idea of a judicial liquidation that would completely defraud these investors of the last hour, very ill-advised. On October 9th, faced with the threat of liquidation which is to be pronounced on November 16th by the commercial court of Lille, the brothers give in. In the imposing wood-paneled library of the SFFAW, on the ground floor of an old building facing Lille station, they sign a provisional agreement for the sale of their 129,904 shares to Bernard Arnault, who, for the first time, begins to believe in his chances of success."

"again. On November 14th, they sign a memorandum of understanding with Arnault under which they sell him 20% of their SFFAW shares, at the unit price of 250 francs, or 32 million francs payable in seven years. In addition, they lend him the shares they still have, for one year, until December 15th, 1985, with all the powers attached to them. In exchange, Bernard Arnault undertakes to have the government accept a recovery plan for the group and to present a concordat. To achieve these objectives, he plans to carry out a capital increase of 400 million, from which the Willot family agrees to be excluded."

"Bernard Arnault wrote to the Prime Minister: "The financial assistance requested from the public authorities will be limited to: the incorporation into the capital of CBSF of the advances from Sopari, up to a limit of 380 million in grants or equivalents; the granting of a loan to CBSF from FDES of 100 million on the best terms. Moreover, I am counting on the support of the public authorities to obtain the participatory loan of 160 million provided for in the financial protocol of June 1982, the payment of which should be made in advance." In return, Bernard Arnault promises the State to make it participate in the profits it could derive from the deal: "The financial assistance granted by the State would benefit to the extent of 300 million from a clause of return to better fortune: they would be reimbursed up to 25% of the dividends distributed annually by SFFAW, or a legal person succeeding it, from the year 1991 included to the year 2005 included.""

"Arnault's stake in SFFAW even rises to 36%, considering additional purchases he made on the stock market. If we add the self-control-that is, the company's shares held by its own subsidiaries-he controls 51% of the shares and therefore holds an absolute power. He will not let go of it anymore."

"This acquisition was concluded for the sum of 840 million Belgian francs from Jean-Pierre de Bodt and the Belgian state, who are, in a way, interim shareholders. Half is paid in SFFAW securities held by the parent company SFFAW and by a Belgian subsidiary, the Peigné de Malines, a former wool spinning mill of the group turned into a holding company. The other part is settled by a two-year bank loan."

"These credits would be guaranteed by the joint guarantee of SFFAW and by a pledge covering 70% of the shares of Sidef-Conforama. In addition, the bridge loan must be secured by a pledge of 70% of the shares forming the capital of Dior. The provision of these securities will be authorized by the boards of directors of SFFAW and BSF on August 19. The memorandum of understanding will be signed on August 20, 1980."

"On the legal front, the parties involved in the case discovered that contrary to what everyone thought, the brothers, who were believed to be completely overwhelmed by the treatments they had been subjected to, were not out of the game. Yet, nothing can be concluded without their agreement to sell their 42% stake in SFFAW. Their shares have double voting rights. Furthermore, control of the group is also reinforced by the titles held by Le Peigné de Malines and by la Belle Jardinière. As of June 1982, to lift this mortgage, Master Chassagnon negotiated a first agreement with the Willot brothers. According to this agreement, the industrial development institute would buy their participation for 64 million francs. It is also provided that the buyer would bear "the possible amount of all commercial or civil sentences, regardless of the jurisdiction that would pronounce them, that could be issued against Messrs. Willot, following liability trials of any kind in which they would be involved and definitively condemned, particularly on the occasion of transferring capital from profitable companies to deficit companies." Furthermore, it is stipulated that the buyers take care of tax adjustments, late payment interests, and penalties imposed on the brothers. In return, they completely disappear from circulation. What more could the people ask for... Unfortunately, Dominique de La Martinière wraps himself in his dignity as a senior official and former director general of taxes, and particularly considers that taking on possible convictions is an unacceptable financial and moral risk for his institution. Seeing that time is on their side, the brothers, far from backing down, raise their heads."

"The distribution subsidiaries held by SFFAW, Au Bon Marché, La Belle Jardinière, and Conforama, which are profitable and not under judicial settlement, continue on their own path. The crown jewel, Christian Dior, a subsidiary of BSF, is already the object of all covetousness. There is talk of taking it public along with Conforama."

"They continue their legal guerrilla warfare. They first appeal the December 1983 ruling of the Lille Commercial Court, which had pronounced the confusion of assets of BSF and SFFAW. Then, in June 1984, they request the outright cancellation of the agreement signed a year earlier with René Mayer, on the grounds, in particular, that they did not receive the positions they had been promised and that the financial situation of the Boussac Saint Frères Company had significantly deteriorated and no longer allows for the presentation of a proposal for concordat."

"The first procedure concerns the appeal that the Willot brothers had filed against a judgment delivered on December 23, 1983, which declared the merger of assets between BSF and SFFAW. This decision was part of the conditions for the implementation of the July 1983 agreement between the Willot brothers and René Mayer. Having not been applied, these agreements are now the subject of another annulment procedure initiated by the Willot brothers before the Lille commercial court, which was to take place on October 12, 1984, with a judgment to be delivered in November. Finally, the brothers will not pursue their appeal for various reasons: it does not contradict their position regarding agreements with CBSF, it has no impact on the criminal proceedings they face for misappropriation of corporate assets, it opens the way to a concordat solution, and finally, would reduce the liabilities to be repaid from 3.1 to 2.7 billion francs."

"In a dramatic turn, it is learned in the meantime that Bernard Arnault, CEO of Ferinel, signed an agreement with the brothers on November 14, subject to the cancellation of the previous commitments with CBSF. This new agreement provides a scheme relatively identical to the previous one. Bernard Arnault acquires 20% of the brothers' stake in SFFAW for 32.5 million francs, payable in seven years, interest-free. The remaining 80% are subject to a loan for use which provides him the benefit of a usufruct. The signatory is advised by Dreyfus Bank which has committed to assemble a group of investors likely to contribute 400 million francs in the capital increase of SFFAW."

"In 1984, SOPARI granted three current account advances: 180 million in March, 200 million in July, and 35 million in October. It is now time to find a private group capable of taking control of CBSF and SFFAW. The ground is being leveled to allow the entrance of the contenders, but nothing is decided yet as long as we do not know who holds the ownership of the SFFAW shares... The court date for the action to annul the agreements concluded between the brothers and CBSF is postponed to November 19 for a judgment that would be rendered on December 17, 1984."

"• The Ferinel plan is being implemented. It incorporates elements already analyzed by the management and the current team, contained in the three-year plan (1984-1986) and relies on various diagnostics provided by expert firms: A. D. Little, etc. Hughes de Lasteyrie, assistant director of Dreyfus bank supervises its writing, which I actively participate in, along with the financial director and the administrative director of the headquarters, under the vigilant eye and following the indications of Bernard Arnault and Pierre Godé. The Ferinel group thus proposes a sustainable solution to ensure the recovery and permanence of the Agache-Willot group by relying on the prior takeover of SFFAW and by integrating the Compagnie Boussac Saint Frères into the Agache-Willot group: - legally, the agreement signed with Mr. Willot on November 14, 1984 ensures the takeover of SFFAW, resolves the complex legal problems that condition the survival of the Agache-Willot group and allows for the presentation of a concordatory solution; • - On the industrial and social level, the plan includes restructuring measures already presented to the public authorities and currently being implemented; • - On the economic and financial level, a capital increase of 400 million francs for SFFAW is planned, to be carried out by private investors brought in by the Ferinel group and Dreyfus bank. This will be carried out as soon as the concordat is approved."

"Although absent at the time of the presentation of the takeover offers for the group, Bernard Tapie does not admit defeat. At the SFFAW meeting held in Lille on May 24, 1985, he tries to turn the situation to his advantage. His advisor, Claude Colombani, representing a group of "ad hoc" small shareholders and with the hoped-for support of the president of La Belle Jardinière, who holds more than 18% of the capital of SFFAW, intends to oppose the resolutions proposed by Bernard Arnault. With a judicial sleight of hand, Hugues de Lasteyrie, the new general director of the group, manages to have him taken into custody for "attempted extortion of funds and signature," long enough to wrap up the meeting."

""From a small family business, the creation of an international conglomerate is based on a number of simple but profitable ideas: • - choosing external growth by purchasing struggling companies at low prices that hold latent resources; • - diversification focused on the textile origin of the group and also the distribution sector; • - restructuring and making profitable the acquired companies through decentralized management and the search for productive niches; • - liquidation of dormant and unnecessary real estate assets. The originality of the system was to develop without any equity from the Willot brothers, by drawing the necessary financial resources for this expansion from the internal resources of affiliated companies... and thus the Willot brothers increased their personal fortune by increasing the value of their stakes, their dividends channeled by SFFAW and the salaries they allocated to themselves in the various subsidiaries.""

"After this operation and some purchases on the stock market, his holding company now owns 36% of the capital, which, together with the self-controlled shares and those held by Peigné de Malines (a subsidiary of SFFAW) and Belle Jardinière, gives him an absolute majority."

"In the contract, the state requires that Bernard Arnault take over CBSF4 at the same time as SFFAW. In return, he asks the government to reset the counters. Bernard Arnault makes two financial commitments. On the one hand, he will have a group of investors subscribe to a capital increase in SFFAW. On the other hand, he accepts a clause for a return to better fortune: if the business becomes prosperous again, Boussac will repay 300 million francs between 1990 and 2005."