Golden Key Ltd, Re Insolvency Act 1986 [2009] EWHC 148 (Ch) (04 February 2009)

Parties

Procedural Posture

Originating Application for Directions Under Insolvency Act 1986 / Judgment on Construction of Payment Priority and Maturity Provisions

Legal Issues

1. 1 Whether funds received prior to the Acceleration Redemption Date should be distributed according to the Post-Wind Down or Post-Acceleration Priority of Payments under the CTSA
2. 2 Whether CP maturing between 23 August and 23 September 2007 should be paid in full as it matures or on a pari passu basis with later maturing CP
3. 3 Whether the service of a Mandatory Acceleration Event notice postponed the maturity dates of CP falling due before the Acceleration Redemption Date

Ratio Decidendi

Funds received prior to the Acceleration Redemption Date must be applied in accordance with the Post-Wind Down Priority of Payments (Section 7.3 CTSA), and CP maturing before the Acceleration Redemption Date is to be paid in full on its stated maturity date from available funds. The service of a Mandatory Acceleration Event notice does not postpone the maturity dates of CP falling due before the Acceleration Redemption Date. After the Acceleration Redemption Date, all remaining CP is to be paid pari passu under the Post-Acceleration Priority of Payments (Section 7.4 CTSA).

Court Disposition

Directions granted; construction of payment priority and maturity provisions determined as per judgment.

Orders

• Receivers to apply funds received prior to 23 September 2007 in accordance with Section 7.3 (Post-Wind Down Priority of Payments) of the CTSA.
• CP maturing before 23 September 2007 to be paid in full on stated maturity dates from available funds.