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force majeure

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    I relistened to the half yearly webcast. As an answer to one of the analysts questions GR said the three hurdles were:

    1. consumer confidence (which is down)
    2. interest rates (also down, but this is good)
    3. bank liquidity (which is improving)

    What I do not understand about all of the negative press recently (Centro next to go under as there has not been any asset sales), is that all of the asset sales rejected have done so "together with lenders". If one of the banks was to force Centro into receivership, in particular CBA who are one of the lead banks for Australian debt, why haven't they forced Centro to sell the assets so far even at a 20% discount to book value - because if they put Centro into receivership that is what they are going to have to do as a minimum.

    In the Wall St Journal there recently was an article about Donald Trump threatening to sue his lenders if they did not give him an extension of a loan claiming force majeure and that the banks themselves were the cause of these problems in the debt markets. Maybe we should get Donald onto the Centro board?

    Its been reported that the banks have basically been controling Centro's actions over the last year - so now could they themselves be open to Centro shareholder action if their actions prove to be the downfall of Centro? It could have been argued that Centro should have been made to make make asset sales or take one of the recapitalisation offers on the table from earlier in the year. Now that the markets have been hit with a "perfect storm" Centro should argue force majeure and insist on a long extension.

    From Wikepedia: :Force Majeure (French for "superior force") is a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as war, strike, riot, crime, act of God (e.g., flooding, earthquake, volcano), prevents one or both parties from fulfilling their obligations under the contract. However, force majeure is not intended to excuse negligence or other malfeasance of a party, as where non-performance is caused by the usual and natural consequences of external forces (e.g., predicted rain stops an outdoor event), or where the intervening circumstances are specifically contemplated."
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