Deutsche Trustee Company Ltd v Cheyne Capital (Management) UK (LLP) & Anor

Deutsche Trustee Company Ltd v Cheyne Capital (Management) UK (LLP) & Anor

Clause 26.4(b) requires confirmation from all Rating Agencies that the appointment of a successor Issuer Servicer or Issuer Special Servicer will not result in an Adverse Rating Event. The absence of confirmation from any Rating Agency (including one that has a policy of not providing such confirmations) prevents replacement, unless each class of Noteholders approves the successor by Extraordinary Resolution. The natural meaning of the clause, the structure of the transaction documents, and the presence of an override mechanism support this interpretation.

Parties
Claimant: Deutsche Trustee Company Limited; First Defendant: Cheyne Capital (Management) UK LLP; Second Defendant: DECO 15 – PAN EUROPE 6 LIMITED
Jurisdiction
England and Wales
Judgment Date
31 July 2015
Procedural Posture
Part 8 Claim (interpretation of Contract) / Judgment After Hearing
Outcome
Declaration granted in favour of the Trustee's interpretation.
Legal Topics
Interpretation of Contract Clauses, Securitisation Transactions, Role of Rating Agencies, CMBS (commercial Mortgage Backed Securities), Trustee Powers and Duties
Commercial Law Banking and Finance Law Contract Law Interpretation of Contract Clauses Securitisation Transactions Role of Rating Agencies CMBS (commercial Mortgage Backed Securities) Trustee Powers and Duties

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 7 Party arguments 2 Amounts and remedies 11
Sign in to unlock

Parties

Deutsche Trustee Company Limited

Claimant

Cheyne Capital (Management) UK LLP

First Defendant

DECO 15 – PAN EUROPE 6 LIMITED

Second Defendant

Procedural Posture

Part 8 Claim (interpretation of Contract) / Judgment After Hearing

Legal Issues

  1. 1 Whether clause 26.4(b) of the Issuer Servicing Agreement permits replacement of the Issuer Special Servicer when a Rating Agency declines to confirm that the appointment will not result in an Adverse Rating Event.

Ratio Decidendi

Clause 26.4(b) requires confirmation from all Rating Agencies that the appointment of a successor Issuer Servicer or Issuer Special Servicer will not result in an Adverse Rating Event. The absence of confirmation from any Rating Agency (including one that has a policy of not providing such confirmations) prevents replacement, unless each class of Noteholders approves the successor by Extraordinary Resolution. The natural meaning of the clause, the structure of the transaction documents, and the presence of an override mechanism support this interpretation.

Court Disposition

Declaration granted in favour of the Trustee's interpretation.

Orders

  • Clause 26.4(b) is to be interpreted as requiring confirmation from all Rating Agencies, unless each class of Noteholders approves the successor by Extraordinary Resolution.