Creditors turn down Canary Wharf rescue

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CANARY WHARF'S main creditors have rejected a pounds 235m bid for the project by a group of New York investors associated with Paul Reichmann, but an Olympia & York spokesman said the group had not abandoned hopes of reviving the Docklands development.

The bid by the New York group - which included former Salomon Brothers executive Lewis Ranieri, CBS chairman Laurence Tisch and Primerica chairman Sandy Weill - would have paid for completion of the project's first phase and contributed to the extension of the Jubilee Line to Canary Wharf. But the banks had expressed objections to the structure of the bid, which would have subordinated their claims on the property to those of the new owners.

Some of the banks also reportedly objected to the presence in the group of O&Y's Mr Reichmann, whom some creditors blame for the pounds 3.5bn debacle. But officials of one US bank in the group said Mr Reichmann's role in the bid was not a factor in the decision, reached earlier this week in New York.

An O&Y spokesman said yesterday the group hoped to resume discussions with the banks 'at an appropriate time'.

The New York bid faced opposition from the start, and was largely dismissed at a meeting of creditors on 14 September in Toronto, O&Y's headquarters.