Marconi Corporation Plc (now Telent Limited), Re [2013] EWHC 324 (Ch) (21 February 2013)

Marconi Corporation Plc (now Telent Limited), Re [2013] EWHC 324 (Ch) (21 February 2013)

The Remainder of Scheme Consideration should be distributed pro rata among all eligible scheme creditors, both bondholders with valid claims and non-bondholder creditors, in accordance with the pari passu principle and the commercial purpose of the schemes, as the scheme documentation gives the court unfettered discretion and exhaustive efforts to trace missing bondholders have been made.

Citation
[2013] EWHC 324 (Ch)
Parties
Applicants/scheme Supervisors: Samantha Bewick and Richard Heis (KPMG LLP); Eurobond Trustee: Law Debenture Trust Corporation Plc; Yankee Bond Trustee: Bank of New York Mellon; Scheme Company: Marconi Corporation Plc (now Telent Limited); Scheme Company: Marconi Plc (now M (2003) Plc)
Jurisdiction
England and Wales
Judgment Date
21 February 2013
Procedural Posture
Application for Directions Under Schemes of Arrangement / Final Distribution and Termination of Schemes
Outcome
Application granted; directions given for distribution of Remainder.
Legal Topics
Schemes of Arrangement, Distribution of Trust Funds, Pari Passu Principle, Bondholder Claims, Liquidation Distribution Principles
Company Law Insolvency Law Trusts Schemes of Arrangement Distribution of Trust Funds Pari Passu Principle Bondholder Claims Liquidation Distribution Principles

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Parties

Samantha Bewick and Richard Heis (KPMG LLP)

Applicants/scheme Supervisors

Law Debenture Trust Corporation Plc

Eurobond Trustee

Bank of New York Mellon

Yankee Bond Trustee

Marconi Corporation Plc (now Telent Limited)

Scheme Company

Marconi Plc (now M (2003) Plc)

Scheme Company

Procedural Posture

Application for Directions Under Schemes of Arrangement / Final Distribution and Termination of Schemes

Legal Issues

  1. 1 How should the residue (Remainder) of Scheme Consideration be distributed under the schemes of arrangement for Marconi Corporation Plc and Marconi Plc?
  2. 2 Should the Remainder be distributed only to bondholders with valid claims or to all eligible scheme creditors pro rata?

Ratio Decidendi

The Remainder of Scheme Consideration should be distributed pro rata among all eligible scheme creditors, both bondholders with valid claims and non-bondholder creditors, in accordance with the pari passu principle and the commercial purpose of the schemes, as the scheme documentation gives the court unfettered discretion and exhaustive efforts to trace missing bondholders have been made.

Court Disposition

Application granted; directions given for distribution of Remainder.

Orders

  • The Remainder shall be distributed pro rata among all eligible scheme creditors, both bondholders with valid claims and non-bondholder creditors.
  • Scheme supervisors are authorised to proceed with penultimate and final distributions and terminate the schemes.