Codere Finance 2 (UK) Ltd, Re Companies Act 2006

Codere Finance 2 (UK) Ltd, Re Companies Act 2006

The differences in rights and benefits between AHC members and other Scheme creditors, including the work fee, backstop fee, interim notes, and advisers’ fees, are not so material as to make it impossible for all Scheme creditors to consult together with a view to their common interest, particularly in light of the likely alternative of liquidation. Therefore, a single meeting of Scheme creditors is appropriate.

Parties
Applicant/company: Codere Finance 2 (UK) Limited; Scheme Creditors/interested Party: Ad hoc group of Scheme creditors (AHC); Objector/scheme Creditor: Kyma Capital Limited
Jurisdiction
England and Wales
Judgment Date
13 September 2020
Procedural Posture
Scheme of Arrangement (companies Act 2006, Part 26) / Application for Convening Order (pre Sanction)
Outcome
Application granted; convening order made.
Legal Topics
Schemes of Arrangement, Class Composition, Creditor Rights, Restructuring, Jurisdiction, Practice Statement Letter
Insolvency Law Company Law Schemes of Arrangement Class Composition Creditor Rights Restructuring Jurisdiction Practice Statement Letter

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Parties

Codere Finance 2 (UK) Limited

Applicant/company

Ad hoc group of Scheme creditors (AHC)

Scheme Creditors/interested Party

Kyma Capital Limited

Objector/scheme Creditor

Procedural Posture

Scheme of Arrangement (companies Act 2006, Part 26) / Application for Convening Order (pre Sanction)

Legal Issues

  1. 1 Whether a single meeting of Scheme creditors should be convened or multiple classes are required due to differences in rights/benefits among creditors, particularly AHC members versus others; Whether benefits such as work fees, backstop fees, interim notes, and advisers’ fees fracture the class for voting purposes; Whether the Practice Statement letter was adequate; Whether the court has jurisdiction to sanction the scheme.

Ratio Decidendi

The differences in rights and benefits between AHC members and other Scheme creditors, including the work fee, backstop fee, interim notes, and advisers’ fees, are not so material as to make it impossible for all Scheme creditors to consult together with a view to their common interest, particularly in light of the likely alternative of liquidation. Therefore, a single meeting of Scheme creditors is appropriate.

Court Disposition

Application granted; convening order made.

Orders

  • A single meeting of Scheme creditors to be convened to consider and, if thought fit, approve the scheme of arrangement.
  • Confirmation that two directors are validly appointed as agents for Chapter 15 recognition in the US.