Law Debenture Trust Corporation Plc v Elektrim Finance BV & Ors

Law Debenture Trust Corporation Plc v Elektrim Finance BV & Ors

The suspension of the Bondholder Nominated Director otherwise than in accordance with the Trust Deed was a breach amounting to an event of default, capable of being certified as materially prejudicial to bondholders. The administrative seizure of subsidiary assets by Polish tax authorities constituted a 'seizure' under the event of default provisions. The interest payment was not made as required, and Law Debenture was entitled to withhold release of funds from the Security Account. The initiation of bankruptcy proceedings in Poland, even if later withdrawn, constituted an event of default. Law Debenture was entitled to summary judgment on these events of default and to indemnity for its...

Parties
Claimant: The Law Debenture Trust Corporation p.l.c.; Defendant: Elektrim Finance B.V.; Defendant: Elektrim S.A.; Defendant: Concord Trust
Jurisdiction
England and Wales
Judgment Date
14 September 2005
Procedural Posture
Civil (commercial/trusts) / Summary Judgment Application
Outcome
Summary judgment granted for claimant
Legal Topics
Events of Default, Bond Trust Deeds, Summary Judgment, Trustee Powers and Duties, Costs and Indemnity, Bankruptcy Proceedings, Contract Interpretation
Commercial Law Trust Law Bankruptcy Law Events of Default Bond Trust Deeds Summary Judgment Trustee Powers and Duties Costs and Indemnity +2 more

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Parties

The Law Debenture Trust Corporation p.l.c.

Claimant

Elektrim Finance B.V.

Defendant

Elektrim S.A.

Defendant

Concord Trust

Defendant

Procedural Posture

Civil (commercial/trusts) / Summary Judgment Application

Legal Issues

  1. 1 Whether the suspension of the Bondholder Nominated Director constituted an event of default under the Trust Deed
  2. 2 Whether the administrative seizure of subsidiary assets by Polish tax authorities constituted an event of default
  3. 3 Whether interest due on the bonds was paid as required or lawfully withheld by the trustee

Ratio Decidendi

The suspension of the Bondholder Nominated Director otherwise than in accordance with the Trust Deed was a breach amounting to an event of default, capable of being certified as materially prejudicial to bondholders. The administrative seizure of subsidiary assets by Polish tax authorities constituted a 'seizure' under the event of default provisions. The interest payment was not made as required, and Law Debenture was entitled to withhold release of funds from the Security Account. The initiation of bankruptcy proceedings in Poland, even if later withdrawn, constituted an event of default. Law Debenture was entitled to summary judgment on these events of default and to indemnity for its...

Court Disposition

Summary judgment granted for claimant

Orders

  • Declaration that the events of default relied on have occurred
  • Acceleration of repayment date for the bonds to the date of the relevant acceleration notice