Orpea: decisive AGM on 28 June

How far can the public authorities go to save Orpea and find a solution for the 267,000 residents of its retirement homes?

A solution is on the table, with Caisse des Dépôts in the lead. But criticism is mounting. On the one hand, the management, the creditors and the State, through Caisse des Dépôts; on the other, the shareholders, who feel they have been wronged and have a grudge against the State.

They point to both financial and substantive issues. In financial terms, the difference between the two parties’ valuations is 3.4 billion euros, according to expert reports. In terms of principles, this plan activates a European directive which means that the company cannot pay out anything to shareholders until creditors have recovered their full stake, a possibility never before activated in France, where savers are traditionally protected.

The outraged minority shareholders have come together in Concert’O, the concert that brings together activist shareholders Mat Immo Beaune and Nextstone, and Adamo, a shareholders’ association.

In this divided atmosphere, the new Chief Executive, Laurent Guillot, the architect of this financial restructuring, focused his speech on the desire to become a “company with a mission” that would bring all parties together in harmony.

Key moments

January 2022:

Journalist Victor Catanet’s book “Les Fossoyeurs” (The Gravediggers) revealed cases of mistreatment that led to the departure of the Managing Director at the time, Yves Le Masne. Between February and October 2022, around thirty of the group’s managers were dismissed for gross misconduct. More than 80 complaints were lodged in the space of a few months by the families of residents, represented by the lawyer Sarah Saldmann. These individual complaints were against Orpea for “endangering the lives of others”, “failure to assist a person in danger”, “involuntary manslaughter” and “violence through negligence”. Faced with the scale of the testimonies, the government took up the case and announced its intention to tighten controls on retirement homes.

April 2022:

Reports from the General Inspectorate of Social Affairs and the Finance Inspectorate pointed to serious malfunctions. In the middle of the presidential election campaign, Brigitte Bourguignon, then Minister Delegate, took Orpea to court.

July 2022:

the company was no longer able to pay its employees’ salaries, so it reached an agreement with its long-standing banking partners. An initial conciliation enabled some assets to be sold abroad, but not enough and not quickly enough.

October 2022:

the group is being placed under court protection with the aim of renegotiating its debt with its creditors. The creditors are in a tug-of-war with the French government, which wants to take control of the retirement home giant in order to preserve and transform the group.

January 2023:

To mark the first anniversary of the outbreak of the scandal, a new edition of Les Fossoyeurs was published on 25 January, with ten new chapters.

March 2023:

Orpea has entered into a new accelerated safeguard procedure. Under this procedure, creditors take precedence over shareholders. The company cannot give anything to shareholders until the affected creditors have recovered their entire stake, which in Orpea’s case is €3.8 billion. Orpea is thus implementing a European directive. Only one proposal meets all these criteria, that of the consortium comprising Caisse des Dépôts, Maif, CNP and MACSF. The proposal from Concert’O, led by David Azoute, does not respect the priority given to creditors.

May 2023:

the shareholders organised around Adamo (association for the defence of minority shareholders) and Concert’O (Orpea’s second largest shareholder, in concert with Mat Immo Beaune and Nextone), requested that an extraordinary general meeting be held to examine the proposals. This request, pleaded before the Court on 23 May, was rejected.

• June 2023:

Concert’O, the concert grouping the activist shareholders Mat Immo Beaune and Nextstone, has published an analysis by Ricol & Lasteyrie, which concludes that the expert report commissioned by Orpea as part of its financial restructuring project underestimates the value of the retirement home operator. Ricol & Lasteyrie arrived at a valuation of 3.4 billion euros higher than that of the independent expert Sorgem commissioned by Orpea (-2.7 billion euros, the value on which the financial restructuring plan is based).

13 June 2023:

Christelle d’Intorini, an opposition MP, questioned the Minister of Finance on two points: firstly, the €3.4 billion valuation difference, and secondly, the political principle, arguing that public money cannot be used to fleece taxpaying investors.

28 June 2023: Annual General Meeting

Shareholders will have to vote on the accelerated safeguard plan, which will then be examined by the specialised commercial court in Nanterre. The court will then be able to impose the plan, even if the shareholders have voted against it. The political and media stakes remain high.



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