Galapagos Bidco S.A.R.L v Dr Frank Kebekus & Ors

Galapagos Bidco S.A.R.L v Dr Frank Kebekus & Ors

The releases and restructuring were effective and complied with the ICA. The proceeds of the sale were in cash or substantially in cash, as set-off is equivalent to cash payment. The releases of Primary Creditors’ claims were unconditional and concurrent. Even if strict compliance with clause 17.4(c) were required, the holders of the HYNs were out of the money as at 9 October 2019, so compliance was unnecessary. The Financial Advisers’ Opinion was valid and conclusive for the Enforcement Objective. Signal’s counterclaim failed.

Parties
Claimant: Galapagos Bidco S.à r.l.; First Defendant: Dr Frank Kebekus; Second Defendant: GLAS Trust Corporation Limited; Third Defendant: Global Loan Agency Services Limited; Fourth Defendant: Global Loan Agency Services Limited; Fifth Defendant: GLAS Trustees Limited; Sixth Defendant: Deutsche Trustees Limited; Seventh Defendant: Signal Credit Opportunities (Lux) Investco II S.à r.l.; Eighth Defendant: Galapagos S.A.
Jurisdiction
England and Wales
Judgment Date
11 September 2024
Procedural Posture
Commercial/financial Restructuring (declaratory Relief) / Final Judgment After Trial
Outcome
Claim allowed; declarations granted in favour of Bidco; Signal’s counterclaim dismissed.
Legal Topics
Intercreditor Agreements, Financial Restructuring, Release of Security, Subordination of Debt, Declaratory Relief
Banking and Finance Law Insolvency Law Contract Law Intercreditor Agreements Financial Restructuring Release of Security Subordination of Debt Declaratory Relief

Case Brief

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Parties

Galapagos Bidco S.à r.l.

Claimant

Dr Frank Kebekus

First Defendant

GLAS Trust Corporation Limited

Second Defendant

Global Loan Agency Services Limited

Third Defendant

Global Loan Agency Services Limited

Fourth Defendant

GLAS Trustees Limited

Fifth Defendant

Deutsche Trustees Limited

Sixth Defendant

Signal Credit Opportunities (Lux) Investco II S.à r.l.

Seventh Defendant

Galapagos S.A.

Eighth Defendant

Procedural Posture

Commercial/financial Restructuring (declaratory Relief) / Final Judgment After Trial

Legal Issues

  1. 1 Whether the restructuring and releases under clause 17 of the Intercreditor Agreement (ICA) were effective and complied with the ICA's conditions, particularly clause 17.4(c) (A), (B), and (C)
  2. 2 Whether the proceeds of the sale were 'in cash or substantially in cash' within the meaning of the ICA
  3. 3 Whether the releases of Primary Creditors' claims were unconditional and concurrent as required

Ratio Decidendi

The releases and restructuring were effective and complied with the ICA. The proceeds of the sale were in cash or substantially in cash, as set-off is equivalent to cash payment. The releases of Primary Creditors’ claims were unconditional and concurrent. Even if strict compliance with clause 17.4(c) were required, the holders of the HYNs were out of the money as at 9 October 2019, so compliance was unnecessary. The Financial Advisers’ Opinion was valid and conclusive for the Enforcement Objective. Signal’s counterclaim failed.

Court Disposition

Claim allowed; declarations granted in favour of Bidco; Signal’s counterclaim dismissed.

Orders

  • Declarations granted as per paragraphs 127 a, b, c, e, f, g, h, i, k, and m of the re-amended particulars of claim, including that the releases and restructuring were effective and the Enforcement Objective was satisfied (based on Schedule 5 paragraph 9 of the ICA).
  • Declarations sought by Signal refused.