'The way to restructure the park is for Walt Disney and/or the banks to repurchase the hotels at their cost,' says Georges Berlioz, senior partner at Berlioz, the legal advisers commissioned by Adam, the bondholders' defence group.
'Let's face it, what is the problem? The Fr13bn of extra debt from the hotels.'
The firm's tough line increases the chance that Disney will become mired in a costly legal battle with the bondholders.
Mr Berlioz believes that Disney is receiving too much of the park's earnings without taking responsibility for any of its liabilities. 'Basically, there are obligations and no assets. We are recommending the park should have its assets and nothing but its assets . . .
'At the moment it has no title to its name, the park, the characters, and it does not receive revenues if there is a book published on the park.'
He says bondholders are in a strong legal position because Disney made the mistakes - both in running the park and in the initial forecasting - that have led to its current predicament.
The law firm is preparing a study on how to restructure the park and considers that the outline restructuring agreed in Paris this week does not go far enough.
Euro Disney, Disney and the banks are said to have drawn up proposals for a Fr12bn restructuring and are optimistic that they can agree on a rescue before the deadline on 31 March. The main components of the deal are expected to be a Fr6bn rights issue and a Fr6bn reduction in Euro Disney's financial costs through a reduction of interest charges on its debts by the banks and through Disney waiving entitlement to fees and royalties.
Disney is prepared to take up its rights, and the banks may be prepared to underwrite the issue.
Once a preliminary deal has been completed, it is anticipated that it might take three months to thrash out the details.
In the meantime, Disney is understood to be willing to bankroll the project.Reuse content