Aabar Block S.A.R.L and Another (Petitioners) v Glenn Maud
| Jurisdiction | England & Wales |
| Judge | Mr. Registrar Briggs |
| Judgment Date | 18 December 2015 |
| Neutral Citation | [2015] EWHC 3681 (Ch) |
| Date | 18 December 2015 |
| Court | Chancery Division |
[2015] EWHC 3681 (Ch)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION BANKRUPTCY COURT
Case No: 1978 of 2015
Royal Courts of Justice, Rolls Building Fetter Lane, London, EC4A 1NL
Mr. Registrar Briggs
Mr. M Phillips QC and Mr. W. Willson (instructed by Linklaters LLP) for the Petitioners Mr. P Arden QC, Mr. H Boeddinghaus and Mr. J Wigley (instructed by Squire Patton Boggs (UK) LLP) for the Respondent
Mr. S Davies QC and Mr. N McCulloch (instructed by TLT Solicitors LLP) for Navarro Ventures S.A.R.L
Mr. Brisby QC and Mr. A Tomson (instructed by Paul Hastings (Europe) LLP) for GA Capital (Europe) LLC
Hearing dates: 1 December 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr. Registrar Briggs:
Introduction
The petitioning creditors seek an immediate bankruptcy order. The debtor asks for a second adjournment. The application to adjourn is considered in circumstances where the Spanish court has sanctioned a Liquidation plan in respect of a group of companies which hold a valuable asset. The debtor owns 50% of the share capital in the group's parent company. The debtor contends that if the Liquidation plan results in a sale of the companies his share capital will be of considerable value and he will be able to meet all creditor claims. The petitioning creditors contend that an adjudication of bankruptcy is needed to allow an independent office-holder to investigate the debtor's affairs. In weighing the various arguments this judgment considers the role of opposing creditors and the purpose behind the petition presented by the petitioning creditors.
The petition to bankrupt Mr. Glenn Maud ("Mr. Maud") was presented to the court on 15 June 2015 by Aabar Block S.A.R.L ("Aabar") and Edgeworth Capital (Luxembourg) S.A.R.L ("Edgeworth") (together the "Petitioning Creditors" or the "Petitioners"). Mr. Robert Tchenguiz ("Mr. Tchenguiz") is the chairman of R20 Limited who advises Edgeworth. He is a property and finance entrepreneur. Aabar is an investment company financed by the Abu Dhabi sovereign wealth fund. The petition arises out of an assignment to Aabar and Edgeworth of loans made to Mr. Maud and his business associate Mr. Quinlan by the Royal Bank of Scotland in September 2008.
The background
In order to understand the arguments advanced for and against making an immediate bankruptcy order, it is necessary to have a grasp of the background. Mr. Maud is a director and 50% shareholder of a Dutch company known as Ramblas Investments BV ("Ramblas"). The other 50% of the share capital is owned by his business associate Mr. Quinlan. Ramblas owns the entire shareholding of another Dutch company, Delma Projectontwikkeling BV ("Delma"). Marme Inversiones 2007 SL ("Marme") is a Spanish company wholly owned by Delma. Marme owns and holds Cuidad Financiera del Banco de Santander in Madrid. This is a valuable office complex situated in central Madrid. It comprises 2 million sq ft and is solely occupied by Banco de Santander (the "Bank"). The Bank leases the complex on a 40 year upward only lease. The complex is used as the Bank's global headquarters ("the Santander Asset"). The Santander Asset has a market value (according to Mr. Maud) of between €3.0–3.5bn.
Mr. Maud and Mr. Quinlan are experienced property entrepreneurs and rode the property market wave fuelled by easy to obtain credit in the years leading up to the Chapter 11 bankruptcy filing of Lehman Brothers Holdings Inc on September 15, 2008. In a judgment delivered earlier this year Mrs. Justice Rose dismissed an application made by Mr. Maud to set aside a statutory demand served by the Petitioners (the "Set Aside Judgment"): Maud v Aabar Block SARL and another [2015] EWHC 1626 (Ch). During the course of her judgment Rose J described how in September 2008 Mr. Maud and Mr. Quinlan acquired the Santandar Asset, and monetarised the cash-flow derived from the lease. They obtained from the Royal Bank of Scotland ("RBS"):
"i) A five year senior loan of Eur1.6 billion to Ramblas through a syndicate of banks headed by Royal Bank of Scotland ("the senior loan"). The senior loan could be accelerated on the occurrence of certain events.
ii) A junior debt for Eur200 million from Royal Bank of Scotland to Ramblas ('the junior loan"). This was secured by, amongst other things, (a) a pledge executed by Mr. Maud and Mr. Quinlan over their shares in Ramblas in favour of RBS; (b) a pledge executed by Ramblas over its shares in Delma; and (c) a limited personal guarantee from Mr. Maud and Mr. Quinlan ("the personal guarantee"). This personal guarantee from Mr. Maud and Mr. Quinlan was secured by a number of instruments, the most relevant one for our purposes being a charge given by Mr. Quinlan in favour of RBS over shares and loan stock that he owned (directly or indirectly) in Coroin Ltd (his "Coroin stake").
iii) A personal loan made to Mr. Maud and Mr. Quinlan by RBS for Eur75 million and then loaned on by them to the Marme Group ("the personal loan"). Mr. Maud and Mr. Quinlan were jointly and severally liable on this loan. This loan was also secured by a number of instruments, again the most relevant one for our purposes being the charge given by Mr. Quinlan in favour of RBS over his Coroin stake."
The reference to his "Coroin stake" is a reference to a company formed by Mr. Quinlan and Mr. McKillen to take over the Savoy Group of hotels and London properties (this is to state it simply). Mr. Quinlan and Mr. McKillen were both 35% shareholders and appointed directors of Coroin. Mr. Maud explains that Mr. Quinlan had provided security to RBS over his shareholding in Coroin (the "Coroin Charge") but Coroin was already subject to charges in favour of another bank. The Barclay Brothers obtained a minority shareholding in Coroin and wanted control. They acquired the earlier security over Coroin and made an agreement that Mr. Quinlan would vote according to their wishes. Mr. McKillen contended that the agreement with the Barclay Brothers triggered pre-emption rights contained in the articles of association entitling him to purchase the shares. The dispute was decided in favour of Mr. Quinlan by David Richards J. At the same time Aabar was pressing for a controlling interest in Coroin. Two agreements resulted. First, Mr. Quinlan was made a party to a deed of sale and adherence dated 23 September 2011 ("the Deed"). Second a deed of the same date known as the Barclay Aabar Agreement made between B Overseas Limited ("BOL")-a vehicle for the Barclay Brothers, Aabar and a Malysian investor known as JQ2 (the two agreements together the "2011 Agreements"). I shall return to the effect of the 2011 Agreements below.
In March 2010 Mr. Maud entered into three loan agreements with Eagle Holdings Limited, Propinvest Group Limited and Propinvest Holdings Limited whereby he borrowed £43,642,944. These loans consolidated earlier loans from Kaupthing Bank hf. A year later Navarro Ventures S.A.R.L (a company registered in Luxembourg) ("Navarro") purchased the debt. By 1 July 2015 the Navarro debt had reached £56,815,317.66 including interest. Alain Heinz ("Mr. Heinz"), a director of Navarro, is a trustee of a trust known as the Glenn Maud Family Trust. The beneficiaries of the trust include Mr. and Mrs. Maud. The evidence before the court is that Mr. and Mrs. Maud are estranged.
Default on the RBS loans in September 2010 triggered the accelerated sums under the personal loan. RBS subsequently assigned the personal and junior loans with the benefit of all securities to the Petitioning Creditors.
In January 2011 Aabar and Edgeworth issued a claim against Ramblas in respect of the junior loan and against Mr. Maud and Mr. Quinlan for recovery of the personal loan. On 17 June 2011 Mr. Justice Teare made an order, by consent, that Ramblas pay €216,582,038.05 inclusive of interest up to 13 June 2011. An order was also made by consent against Mr. Maud and Mr. Quinlan in the sum of €52,565,110.31. In the same proceedings Aabar and Edgeworth claimed in respect of an Upside Fee Agreement ("UFA") against Ramblas. Mr. Justice Hamblen found in favour of Aabar and Edgeworth and judgment was entered on 30 January 2015 against Ramblas in the sum of €105,201,095.89 plus interest. Permission to appeal the order of Hamblen J has been granted.
As mentioned above the Deed reflected in part the Barclay Aabar Agreement. The 2011 Agreements provided that the Petitioning Creditors would release the Coroin Charge in exchange for a payment by BOL of £9.4 million to Aabar, and Mr. Quinlan agreed:
8.1. to sell his shares in Ramblas to Aabar for one euro subject to the pre-emption rights ofthe other shareholders in Ramblas;
8.2. to co-operate with the Petitioners to the extent that he was able to prevent such preemption rights being exercised;
8.3. to complete the transfer of shares to Aabar as soon as it was possible under the Ramblas articles of association;
8.4. not to directly or indirectly challenge or in any way contest or otherwise seek to frustrate any enforcement action in respect of all or any of the shares in Ramblas;
8.5. not to provide any assistance to any person in relation to Ramblas other than as Aabar directed;
8.6. to provide evidence that the value of Ramblas shares is nil; and
8.7. in the event that he were unable to complete the transfer of his share to the Petitioners, exercise his voting rights and other rights in relation to Ramblas in accordance with the directions of Aabar.
The background to the Deed is explained by Rose J in the Set Aside Judgment (para 17):
"[Mr....
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