Icopal as and Others

JurisdictionEngland & Wales
CourtChancery Division
JudgeMrs Justice Proudman
Judgment Date24 July 2013
Neutral Citation[2013] EWHC 3469 (Ch)
Date24 July 2013
Docket NumberCase No: 4906-10 of 2013

[2013] EWHC 3469 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

COMPANIES COURT

The Rolls Building

Fetter Lane

London EC4A 1NL

Before:

The Honourable Mrs Justice Proudman

Case No: 4906-10 of 2013

Between:
In The Matter of Icopal as and Others

Mr Gabriel Moss QC and Mr Adam Goodison (instructed by Shearman & Sterling (London) LLP) appeared on behalf of the Companies

Mr Robin Dicker QC (instructed by Clifford Chance) appeared on behalf of the Supporting Creditors

Approved Judgment

(Please note that due to the poor quality of digital recording, it has not been possible to produce a high quality transcript in this case.)

Mrs Justice Proudman
1

There are before me four applications by four companies to convene scheme meetings. In the actions the companies seek approval of schemes of arrangement pursuant to section 899 of the Companies Act 2006. Today however I am only concerned with convening the scheme meetings.

2

A large majority of the scheme creditors who are the lenders under an existing seeking facilities agreement support the proposed schemes and indeed have entered into lock up agreements. Mr Dicker QC attends today to represent the principal creditors.

3

Two of the lenders, however, are relentlessly opposed to the scheme, namely Svenska Handelsbanken AB and HSH Nordbanken AG. They both wrote to the companies on 22 July 2013 to express their opposition, in particular to the points that are being raised today.

4

The purpose of the scheme is a restructuring with a view to refinancing by 2016. The Group says it believes that in the absence of the schemes the Group will enter into an insolvency procedure and the proceeds available to creditors will be much reduced.

5

A single class of scheme creditors is proposed for each of the companies.

6

The dissenting lenders oppose the relief sought today basically on two grounds; one enforceability in other jurisdictions; and, two, they say the scheme lenders should not form a single class of creditors for the purpose of each scheme.

7

The court's function at the convening application stage is to deal with questions of jurisdiction and identify the appropriate classes for the purposes of convening meetings to vote on the scheme proposals. It is not as David Richards J said in Telewest (No 1) a hearing to consider the merits and fairness of the schemes which are to be considered at the sanctions hearing. On the other hand, it is only a matter of common sense that, as he went on to say, "there is no point in the court convening meetings to consider the scheme if it can be seen now that it will lack the jurisdiction to sanction it later".

8

Accordingly, I must consider (a) whether the companies are liable to be wound up under the Insolvency Act 1986 as required by Companies Act 2006 section 895(2)(b), including whether they have sufficient connection with the jurisdiction for a scheme of arrangement to be sanctioned given the decision in Drax Holdings and (b) whether the class of creditors proposed is correctly constituted.

9

As to jurisdiction, Nordbanken says, "It is not at all clear that it is appropriate for the English courts to take jurisdiction over these companies. We hope the court will consider this very carefully". That appears (because of the word "appropriate") to be a reference to discretion. Handelsbanken's objection is more specific. It is said, first, in relation to Roofing Holding as that company is incorporated in Delaware, recognition must be obtained by the US Court under Chapter 15 of the US Bankruptcy Code. For this to happen it is said that either the company's COMI must be England or it must have an establishment in England. It is said that neither applies so that the scheme will not be recognised in RH's home jurisdiction. In relation to RFG Holding (France) SAS, Handelsbanken relies on the French Supreme Court's decision in MSX v Banque Privee Edmond de Rothschild to say that the English jurisdiction clause is invalid in France. Again therefore it is maintained that the scheme will not be recognised in the company's home jurisdiction.

10

I am satisfied for today's purposes that the companies are liable to be wound up under the Insolvency Act 1986. I note that the court will not as a matter of discretion wind up a company without a sufficient connection to the jurisdiction. The English law jurisdiction clause gives rise to a sufficient connection to the jurisdiction: Re Rodenstock GmbH [68] and Re Primacom Holding GmbH [18] and [61] to [64]. I have also been taken to Article 44 of the Council Regulation, which establishes that Rodenstock is pretty well on all fours with the present case in relation to jurisdiction to sanction this scheme.

11

However, what is...

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