DX Holdings Ltd & Ors [2010] EWHC 1513 (Ch) (21 June 2010)

DX Holdings Ltd & Ors [2010] EWHC 1513 (Ch) (21 June 2010)

The existence of fees under the Lock Up Agreement does not create a separate class because the benefits were available to all creditors, the fees are immaterial compared to the common interests, and there is no evidence that the fees would induce a creditor to vote against its substantive interests.

Citation
[2010] EWHC 1513 (Ch)
Parties
Applicant/scheme Company: DX Holdings Limited; Applicant/scheme Company: DX Secure Mail Limited; Respondent/consenting Lenders: Co-ordinators' Committee
Jurisdiction
England and Wales
Judgment Date
21 June 2010
Procedural Posture
Scheme of Arrangement Application / Application for Convening Creditors' Meetings
Outcome
Application granted
Legal Topics
Schemes of Arrangement, Class Composition of Creditors, Lock Up Agreements
Insolvency Company Law Schemes of Arrangement Class Composition of Creditors Lock Up Agreements

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Parties

DX Holdings Limited

Applicant/scheme Company

DX Secure Mail Limited

Applicant/scheme Company

Co-ordinators' Committee

Respondent/consenting Lenders

Procedural Posture

Scheme of Arrangement Application / Application for Convening Creditors' Meetings

Legal Issues

  1. 1 Whether creditors who are party to a Lock Up Agreement and receive fees form a separate class for the purposes of a scheme of arrangement under section 896 of the Companies Act 2006.

Ratio Decidendi

The existence of fees under the Lock Up Agreement does not create a separate class because the benefits were available to all creditors, the fees are immaterial compared to the common interests, and there is no evidence that the fees would induce a creditor to vote against its substantive interests.

Court Disposition

Application granted

Orders

  • Meetings of creditors of each class in each Scheme Company to be convened to consider and, if thought fit, approve the Scheme of Arrangement.