Galapagos Bidco SARL v Kebekus & Ors [2023] EWHC 1931 (Ch) (28 July 2023)

Galapagos Bidco SARL v Kebekus & Ors [2023] EWHC 1931 (Ch) (28 July 2023)

The court held that the restructuring and releases effected under clause 17 of the ICA were effective. The conditions in clause 17.4(c) were satisfied: the consideration was 'in cash or substantially in cash' despite partial set-off, and all relevant claims were unconditionally released. Even if there were technical deficiencies, the holders of the HYNs were out of the money and had no legitimate economic interest in enforcing strict compliance. The contractual machinery was properly followed, and the releases were valid.

Citation
[2023] EWHC 1931 (Ch)
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
28 July 2023
Procedural Posture
Claim for Declaratory Relief / High Court (chancery Division) Final Judgment
Outcome
Claimant's claim for declaratory relief granted; Signal's counterclaim dismissed.
Legal Topics
Intercreditor Agreements, Distressed Disposals, Release of Security, Ranking of Creditors, Restructuring of Debt, Interpretation of Contractual Clauses
Banking and Finance Insolvency Contract Intercreditor Agreements Distressed Disposals Release of Security Ranking of Creditors Restructuring of Debt +1 more

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

Claim for Declaratory Relief / High Court (chancery Division) Final Judgment

Legal Issues

  1. 1 Whether the restructuring and releases effected under clause 17 of the Intercreditor Agreement (ICA) were effective and valid
  2. 2 Whether the conditions in clause 17.4(c) of the ICA were satisfied, particularly regarding 'cash or substantially in cash' consideration and unconditional release of claims
  3. 3 Whether compliance with clause 17.4(c) was necessary if the holders of the High Yield Notes (HYNs) were 'out of the money'

Ratio Decidendi

The court held that the restructuring and releases effected under clause 17 of the ICA were effective. The conditions in clause 17.4(c) were satisfied: the consideration was 'in cash or substantially in cash' despite partial set-off, and all relevant claims were unconditionally released. Even if there were technical deficiencies, the holders of the HYNs were out of the money and had no legitimate economic interest in enforcing strict compliance. The contractual machinery was properly followed, and the releases were valid.

Court Disposition

Claimant's claim for declaratory relief granted; Signal's counterclaim dismissed.

Orders

  • Declaration that the restructuring and releases under clause 17 of the ICA were effective and valid.
  • Signal's counterclaim for declarations of ineffectiveness dismissed.