Luxury hotels owned by French businessman Michel Ohayon emerge from bankruptcy

The Commercial Court of Bordeaux has approved the recovery plan for the three luxury hotels owned by French businessman Michel Ohayon, despite the opposition of his main creditor, following a ruling that the AFP agency learned of on Monday.

These are the Grand Hotel in Bordeaux, currently managed by the InterContinental group, the Sheraton hotel at Roissy-Charles de Gaulle airport in Paris and the Trianon Palace in Versailles, managed by the Waldorf Astoria (of the Hilton group).

The properties are valued at more than €500 million in total and are owned by Financière Immobilière Bordolaise (FIB), Ohayon's holding company, through subsidiaries that entered bankruptcy at the end of January 2023.

As indicated in the ruling of the Bordeaux court of February 28, the hotel division of the FIB was developed mainly thanks to the financial support of the Bank of China, from which the FIB received three loans for a total of 201 million euros, between 2014 and 2017.

The loan repayment fell through when FIB, which had gone bankrupt, began to face significant financial difficulties, which it said were caused by the impact of the pandemic on its property income.

The latter comes from the FIB's hotel business and its retail operations. the fashion chain Camaïeu, owned by the FIB, which has been liquidated; Go Sport and Gap France, both already sold; and 26 Galeries Lafayette stores, currently under protection procedure, will be able to leave at the end of March.

The Bank of China, which requested the liquidation of the subsidiaries that own the three hotels, rejected the business continuity plan presented by Ohayon.

But the court found that the plan, after modifications made at its request, was economically viable and included sufficient guarantees that the FIB subsidiaries would be able to pay off their debt within four years.

The AFP contacted the Bank of China's lawyers, in particular to find out if their client wants to appeal, but they have not yet responded.

An FIB lawyer was also contacted but declined to comment. The FIB remains bankrupt, as the Commercial Court has recently extended its monitoring period, for the second time, by six months.