Bluebrook Ltd, Re

Bluebrook Ltd, Re

The Mezzanine Lenders have no real economic interest in the companies as the value of the group is significantly less than the Senior Debt. The schemes do not affect their legal rights, and the directors were not obliged to negotiate for them. The schemes are fair and appropriate in the circumstances and should be sanctioned.

Parties
Applicant: Bluebrook Ltd; Applicant: IMO (UK) Ltd; Applicant: Spirecove Ltd; Objector: Mezzanine Co-ordinating Committee; Interested Party: Senior Steering Committee
Jurisdiction
England and Wales
Judgment Date
11 August 2009
Procedural Posture
Scheme of Arrangement (companies Act) / Sanction Hearing
Outcome
Schemes sanctioned (subject to final review of minor points)
Legal Topics
Schemes of Arrangement, Creditors' Rights, Subordination, Valuation of Assets, Directors' Duties
Insolvency Company Law Schemes of Arrangement Creditors' Rights Subordination Valuation of Assets Directors' Duties

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 11 Party arguments 2 Amounts and remedies 8
Sign in to unlock

Parties

Bluebrook Ltd

Applicant

IMO (UK) Ltd

Applicant

Spirecove Ltd

Applicant

Mezzanine Co-ordinating Committee

Objector

Senior Steering Committee

Interested Party

Procedural Posture

Scheme of Arrangement (companies Act) / Sanction Hearing

Legal Issues

  1. 1 Whether the schemes of arrangement should be sanctioned despite objections from subordinated creditors (Mezzanine Lenders)
  2. 2 Whether the Mezzanine Lenders have an economic interest in the companies justifying their participation or protection in the schemes
  3. 3 Whether the schemes are unfair or operate to the prejudice of the Mezzanine Lenders

Ratio Decidendi

The Mezzanine Lenders have no real economic interest in the companies as the value of the group is significantly less than the Senior Debt. The schemes do not affect their legal rights, and the directors were not obliged to negotiate for them. The schemes are fair and appropriate in the circumstances and should be sanctioned.

Court Disposition

Schemes sanctioned (subject to final review of minor points)

Orders

  • Schemes of arrangement between Bluebrook Ltd, IMO (UK) Ltd, Spirecove Ltd and their Senior Lenders are sanctioned.