Case Study

Olympia & York

CLIENT: Certain estates of the Olympia & York ("O&Y") bankruptcy

Gordian Group provided expert witness services relating to solvency and valuation in connection with O&Y’s bankruptcy.

Business Profiles

Situation

O&Y was a Canadian-based real estate empire with global interests. At the time, O&Y was considered the world’s biggest real estate conglomerate and developer. The Reichmann family’s flagship company, Olympia & York, was the pride of Toronto. The Reichmanns owned the World Financial Center and numerous other prestigious buildings and were considered the largest private landlord in Manhattan. However, in the 1990’s, this empire began to crumble due to depressed commercial real estate markets, O&Y’s large (and unoccupied) projects and its excessive leverage. In an attempt to stave off bank creditors, O&Y transferred collateral pledges around its Byzantine structure. In the end, this "last ditch" effort failed to prevent U.S. and Canadian bankruptcies—but it did create turmoil regarding which legal entities had pledged which collateral to which creditors.

Engagement

Gordian Group provided expert witness services to the bankruptcy trustee in connection with solvency and valuation matters in this highly complex litigation. We were engaged by the O&Y Canadian estate to assist in its litigation versus the reorganized debtor in the U.S. Our work entailed detailed analyses of the O&Y structure prior to filing for bankruptcy, analyses of various prebankruptcy transfers, valuations of certain estate assets and analyses of the degree of solvency of various O&Y entities. In connection with this complex forensic analysis, we examined the value and solvency of various O&Y entities that had issued guarantees or provided collateral coverage.

Outcome

Gordian Group was able to show that the O&Y conduct materially and adversely affected certain of the subsidiary estates.