Source: All England Reporter
Publisher Citation: [2009] All ER (D) 101 (Aug)
Neutral Citation: [2009] EWHC 2114 (Ch)
Court: Chancery Division

Mann J

Representation Robin Dickers QC and Richard Fisher (instructed by Latham & Watkins (London) LLP) for the companies.
  David Chivers QC and Stephen Horan (instructed by Gide Loyrette Nouel LLP) for the Mezzanine Co-ordinating Committee.
  Gabriel Moss QC and Adam Al-Attar (instructed by Lovells LLP) for the Senior Steering Committee.
Judgment Dates: 11 August 2009


Company - Scheme of arrangement - Compromise with creditors or members - Group of companies taking senior debt and subordinated debt - Intercreditor agreement subordinating subsidiary company debt to parent company debt - Companies balance sheet insolvent - Proposing group restructuring between group and senior lender - Application for sanction of scheme of arrangement - Junior lenders opposing scheme of arrangement - Whether unfair prejudice - Whether economic value in companies exceeding senior debt - Whether group directors in breach of duty towards junior lenders.

The Case

Company Scheme of arrangement. The Chancery Division held that, under established case law and on the evidence, the mezzanine lenders were not bound by the proposed scheme of arrangement and their legal rights were not affected. There had been no unfairness towards the mezzanine lenders and they were found not to have a relevant economic interest in the companies that proposed the schemes. The scheme of arrangement would be further considered for sanction by the court.

Practice Areas

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