British Aviation Insurance Company Ltd, Re [2005] EWHC 1621 (Ch) (21 July 2005)

British Aviation Insurance Company Ltd, Re [2005] EWHC 1621 (Ch) (21 July 2005)

The scheme meeting was properly constituted and notified as far as reasonably practicable. The class of scheme creditors was correctly identified as having sufficiently similar rights. The process for valuation and adjudication of claims, including IBNR claims, is fair and reasonable. The scheme is not inherently unfair and is one which an intelligent and honest member of the class might reasonably approve. The court's discretion should be exercised to sanction the scheme.

Citation
[2005] EWHC 1621 (Ch)
Parties
Petitioner: British Aviation Insurance Company Limited; Respondents/opposing Creditors: Opposing Creditors (18 US corporations, direct insureds); Opposing Creditors: United Technologies Corporation & Ors
Jurisdiction
England and Wales
Judgment Date
21 July 2005
Procedural Posture
Scheme of Arrangement (companies Act 1985, S.425) / Final Sanction Hearing After Creditors' Meeting
Outcome
Scheme sanctioned
Legal Topics
Scheme of Arrangement, Solvent Insurance Run Off, Class Constitution of Creditors, Notice to Creditors, Valuation of IBNR Claims, Court's Discretion to Sanction Scheme
Company Law Insurance Law Insolvency Law Scheme of Arrangement Solvent Insurance Run Off Class Constitution of Creditors Notice to Creditors Valuation of IBNR Claims +1 more

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Parties

British Aviation Insurance Company Limited

Petitioner

Opposing Creditors (18 US corporations, direct insureds)

Respondents/opposing Creditors

United Technologies Corporation & Ors

Opposing Creditors

Procedural Posture

Scheme of Arrangement (companies Act 1985, S.425) / Final Sanction Hearing After Creditors' Meeting

Legal Issues

  1. 1 Whether the scheme meeting was properly constituted and notified
  2. 2 Whether the classes of creditors were correctly identified
  3. 3 Whether the scheme is fair and reasonable to all creditors, especially those with IBNR claims

Ratio Decidendi

The scheme meeting was properly constituted and notified as far as reasonably practicable. The class of scheme creditors was correctly identified as having sufficiently similar rights. The process for valuation and adjudication of claims, including IBNR claims, is fair and reasonable. The scheme is not inherently unfair and is one which an intelligent and honest member of the class might reasonably approve. The court's discretion should be exercised to sanction the scheme.

Court Disposition

Scheme sanctioned

Orders

  • The scheme of arrangement is sanctioned under s.425 Companies Act 1985.
  • All scheme creditors are bound by the terms of the scheme as approved.