Orco Property Group : Luxembourg District Court Cancels Luc Leroi’s Bondholders’ General Meetings



Mr. Luc Leroi is the Bondholders’ representative for the 2010, 2013 and 2014 Bonds. In early April, he convened three Bondholder general meetings for 13 April 2011 and again for 26 April 2011. The agenda for all meetings was identical but vague.

Only upon a review of the voting certificates prepared by Mr. Leroi, but not published in the press, were Mr. Leroi’s intentions made clear: Mr. Leroi sought to withhold EUR 750,000 from Orco’s 30 April payment to Bondholders under the Plan de Sauvegarde. He intended to use these funds at his own discretion to pay fees to himself and various advisors involved in legal proceedings against Orco.

However, Mr. Leroi’s Bondholder convening notices contained irregularities and Orco therefore filed an emergency motion with the Luxembourg District Court to cancel the three Bondholder meetings scheduled for 26 April. On 20 April, the President of the Luxembourg District Court granted Orco’s motion and thereby prohibited the Bondholder meetings from being held on 26 April.

As a result, the entire payment that Orco delivered last week is going to the Bondholders without any sum being withheld by Mr Leroi.

When Mr. Leroi left Orco in 2009 as Chief Financial Officer, he committed not to engage in activities that could potentially damage Orco. As the Bondholders’ representative since late 2009, Orco fails to see how he has met this commitment and fails to see how he has acted in the best interest of all Bondholders.

In 2010, without prior approval from the Bondholders, Mr. Leroi released erroneous information and criticisms to the media regarding Orco’s Plan de Sauvegarde. He also filed, on his own initiative and without the prior consultation of the Bondholders, a legal challenge to Orco’s Plan de Sauvegarde.

Furthermore, Mr. Leroi has admitted that he takes instructions from less than 20% of the Bondholders and yet claims up to EUR 45,000 every time he calls Bondholders’ general meetings plus a fixed income of EUR 60,000 per year.

Orco values communication with its Bondholders but Mr. Leroi is blocking any productive dialogue. Moreover, as seen over the last month, his failure to communicate with all Bondholders risks depriving them of a part of their rights or reimbursements.

Orco seeks increased consultation with the Bondholders so they receive complete and accurate information. Mr. Leroi is not fostering this communication.

Should Bondholders wish to speak to Orco about these or other matters, we welcome your feedback at bondholders@orcogroup.com.

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