Citicorp Trustee Company Ltd v Barclays Bank Plc & Ors [2013] EWHC 2608 (Ch) (23 August 2013)

Citicorp Trustee Company Ltd v Barclays Bank Plc & Ors [2013] EWHC 2608 (Ch) (23 August 2013)

The disenfranchisement provisions in the Trust Deeds only apply to Notes held by a 'Seller' in its capacity as Seller, and to 'beneficial owners' in the traditional proprietary sense. Barclays did not hold the Disputed Barclays Notes as Seller, and Rabobank was neither Issuer nor Seller. Contractual or economic control does not amount to beneficial ownership. Therefore, neither the Disputed Barclays Notes nor the Disputed Rabobank Notes are disenfranchised.

Citation
[2013] EWHC 2608 (Ch)
Parties
Claimant: Citicorp Trustee Company Ltd; First Defendant: Barclays Bank Plc; Second Defendant: Theatre (Hospitals) No 1 Plc; Third Defendant: Theatre (Hospitals) No 2 Plc; Fourth Defendant: Cooperative Centrale Raiffeisen-Boerenleenbank B. A. (trading as Rabobank International); Fifth Defendant: Capita Asset Services (London) Ltd; Sixth Defendant: Ambac Assurance UK Ltd; Seventh Defendant: Ambac Credit Products LLC; Eighth Defendant: XY
Jurisdiction
England and Wales
Judgment Date
23 August 2013
Procedural Posture
Part 8 Proceedings / Judgment After Expedited Trial
Outcome
Neither the Disputed Barclays Notes nor the Disputed Rabobank Notes are disenfranchised.
Legal Topics
Construction of Trust Deeds, Disenfranchisement of Noteholders, Beneficial Ownership, Voting Rights in Noteholder Meetings
Trusts Banking and Finance Commercial Law Construction of Trust Deeds Disenfranchisement of Noteholders Beneficial Ownership Voting Rights in Noteholder Meetings

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Parties

Citicorp Trustee Company Ltd

Claimant

Barclays Bank Plc

First Defendant

Theatre (Hospitals) No 1 Plc

Second Defendant

Theatre (Hospitals) No 2 Plc

Third Defendant

Cooperative Centrale Raiffeisen-Boerenleenbank B. A. (trading as Rabobank International)

Fourth Defendant

Capita Asset Services (London) Ltd

Fifth Defendant

Ambac Assurance UK Ltd

Sixth Defendant

Ambac Credit Products LLC

Seventh Defendant

XY

Eighth Defendant

Procedural Posture

Part 8 Proceedings / Judgment After Expedited Trial

Legal Issues

  1. 1 Whether the Disputed Barclays Notes and Disputed Rabobank Notes are disenfranchised under the Trust Deeds for voting purposes
  2. 2 Interpretation of 'Seller' and 'beneficial owner' in the context of disenfranchisement provisions

Ratio Decidendi

The disenfranchisement provisions in the Trust Deeds only apply to Notes held by a 'Seller' in its capacity as Seller, and to 'beneficial owners' in the traditional proprietary sense. Barclays did not hold the Disputed Barclays Notes as Seller, and Rabobank was neither Issuer nor Seller. Contractual or economic control does not amount to beneficial ownership. Therefore, neither the Disputed Barclays Notes nor the Disputed Rabobank Notes are disenfranchised.

Court Disposition

Neither the Disputed Barclays Notes nor the Disputed Rabobank Notes are disenfranchised.

Orders

  • The court declares that the Disputed Barclays Notes and Disputed Rabobank Notes are not disenfranchised for voting purposes under the Trust Deeds.
  • All parties affected by the decision are bound, including the class representative for junior Noteholders (XY).