Re Pimlico Capital Ltd

: April 30 and May 1, 2002

Pimlico Capital Limited ("Pimlico") is a company incorporated in 1999 under the International Business Companies Act of the British Virgin Islands.

The sole registered shareholder of Pimlico is Centovaro Trust ("Centovaro"), a Liechtenstein trust entity. In August 2001 Centovaro charged its shareholding in Pimlico to TFB (Mortgages) Limited ("TFB"), an Irish financial institution, to secure substantial loans to Anglo Petroleum Ltd ("Anglo"), a company incorporated under the Companies Act 1929 with its registered office in England. Pimlico and Anglo hold petrol station sites in England, and are ultimately owned by Mr Paul Sutton, a property developer and investor based in Bermuda, who acquired the sites to exploit their development potential. He and his family are also the beneficiaries of Centovaro.

Since November 2001 TFB has been seeking to enforce its security rights in relation to the share capital in Pimlico by using a power of attorney granted to TFB by Centovaro to have itself registered as the sole shareholder of Pimlico and by replacing the existing board. Pimlico has resisted the efforts of TFB, and Anglo has also challenged TFB's right to have administrative receivers appointed over Anglo's undertaking.

On November 13, 2001 TFB presented a contributory's petition against Pimlico. At the time of the presentation of the petition Pimlico was the owner (but not, it would seem, the operator) of three garages in London. The winding up was therefore a winding up of an unregistered company under section 221 of the Insolvency Act 1986. There is no question about the jurisdiction of the English court to wind up Pimlico.

The applications before me are an application by Pimlico to strike out the petition and an application by TFB and Centovaro to amend the petition by adding Centovaro as a petitioner on the basis that TFB is entitled to petition as the attorney and in the name of Centovaro.

BACKGROUND

On February 23, 2001 TFB entered into a credit agreement with Anglo for the financing of the acquisition of petrol stations. The facility was for £15 million. The repayment date was August 22, 2001. The credit agreement contained default provisions (many of which are of the usual kind), the effect of which was that TFB, on and at any time after the occurrence of an event of default, could by notice demand that the loan be immediately due and payable or be payable on demand. The events of default included cross-defaults under financial indebtedness to other lenders and the presentation of any winding up petition against Anglo. The credit agreement was expressed to be governed by English law. The loan was secured by fixed and floating charges over the undertaking of Anglo.

In August 2001 the facility was re-negotiated and extended to February 21, 2002. When the facility was re-negotiated and extended TFB took on August 22, 2201, a charge over the issued share capital of Pimlico, which (as I have mentioned) was another company in which Mr Sutton had an interest, and which owned three garages in London. The sole shareholder of Pimlico was Centovaro which held a single $1 share. The ultimate beneficiaries of Centovaro are Mr Sutton and his family.

By the charge Centovaro covenanted with TFB that it would on demand pay and discharge all moneys due or owing by Anglo to TFB; and Centovaro charged all the shares in Pimlico owned by it by way of first fixed charge to TFB as a continuing security for the payment of all moneys due by Anglo to TFB.

By clause 4.2(a):

(a) the Lender and its nominees at the discretion of the Lender may exercise in the name of the Chargor or otherwise at any time whether before or after demand for payment and without any further consent or authority on the part of the Chargor in respect of the Securities any voting rights and any powers or rights which may be exercisable by the person in whose name the Securities are registered or by the bearer thereof; but such power shall be exercised subject to the provisions of Clause 5…."

Clause 5 provided that until TFB had made a demand on Anglo or until the occurrence of an event of default under the credit agreement TFB would exercise all powers attached to the Securities as Centovaro might from time to time direct.

By clause 8.1(a):

"At any time after the Lender shall have demanded payment of any of the Secured Obligations:

(a) the Lender and any nominee of the Lender wheresoever situate may without further notice and without the restrictions contained in section 103 of the Law of Property Act 1925 in respect of all or any of the Securities exercise all the powers or rights which may be exercisable by the registered holder of the Securities and all other powers conferred on mortgagees by the Law of Property Act 1925 as hereby varied or extended…"

By clause 11:

"1. The Chargor hereby irrevocably appoints the following, namely:

(a) the Lender; and

(b) each and every person to whom the Lender shall from time to time have delegated the exercise of the power of attorney conferred by this Clause 11;

jointly and also severally to be its attorney or attorneys and in its name and otherwise on its behalf to sign, seal, execute, deliver, perfect and do all deeds, instruments, documents, acts and things which may be required (or which the lender shall consider requisite) for carrying out any obligation imposed on the Chargor by or pursuant to this Charge, for carrying any sale or other dealing by the Lender into effect, for getting in the Securities, and generally for enabling the Lender to exercise the powers conferred on it by or pursuant to this Charge or by law. The Lender shall have full power to delegate the power conferred on it by this Clause 11.1, but no such delegation shall preclude the subsequent exercise of such power by the Lender itself or preclude the Lender from making a subsequent delegation thereof to some other person and any such delegation may be revoked by the Lender at any time.

2. The power of attorney hereby granted is as regards the Lender and its delegates (and as the Chargor hereby acknowledges) granted irrevocably and for value as part of the security constituted by this Charge to secure proprietary interests in and the performance of obligations owed to the respective donees within the meaning of the Powers of Attorney Act 1971."

The charge was expressed to be governed by English law and subject to English jurisdiction (except that TFB had the right to take proceedings in any other court of competent jurisdiction).

The charge was entered into on behalf of Centovaro by Dr Thomas Nigg as trustee. He was also one of the directors of Pimlico (the others being Mr Sutton and Mr Ernst Nigg) who passed a series of resolutions on August 22, 2001. The Board noted that TFB had offered to make available to Anglo a £15 million loan, and that it was a condition of the availability of the loan that Anglo granted in favour of TFB a charge by Centovaro over the entire issued share capital in Pimlico. The Board resolved that (1) upon the security created by the charge becoming enforceable the company approved and authorised the transfer of the shares to TFB, and would, upon receiving written instructions from TFB so to do, enter details of the transfer of the shares to TFB on the register; (2) the memorandum of association be amended by inserting clause 13A to provide that the directors were not to decline to register any transfer of shares where the transfer was (among other circumstances) to any bank to whom the shares had been charged by way of security.

Another lender to Anglo was GE Capital Commercial Finance Ltd ("GE Capital"). In December 2000 GE Capital lent Anglo approximately £3.9 million to acquire assets from a company engaged in a similar business. GE Capital took fixed and floating charges over Anglo's assets. Although there is no evidence before me about it, there is an agreement as to priority as between TFB and GE Capital, the effect of which is that the GE Capital charges are postponed to those of TFB in respect of all assets of Anglo other than Anglo's book debts, as to which GE Capital took priority. The GE Capital debt was guaranteed by Pimlico, and secured by a charge over one or more of the sites.

In the summer or autumn of 2001 Anglo entered into negotiations with the administrative receivers of Save Service Stations Ltd ("Save") to acquire from them various properties at a cost of £55 million. Anglo incorporated a subsidiary named Anglo Oil Trading Ltd ("AOTL") which entered into an agreement with the administrative receivers to make the purchase, and Anglo guaranteed the obligations of its subsidiary. AOTL was not able to complete the purchase (which Anglo says was the fault of TFB for not providing promised finance of £55 million), and on October 24, 2001 the administrative receivers of Save caused a winding up petition to be presented against Anglo for a debt of £2.6 million said to be due under the acquisition agreements. It was subsequently dismissed.

On September 12, 2001 GE Capital terminated its facility to Anglo on the ground of breaches of the facility. On November 9, 2001 TFB served a notice of default on Anglo under the credit agreement, and demanded immediate repayment of the sum of £14,250,000. The following events of default were specified (although clause 15 of the credit agreement did...