Myers & Anor v Kestrel Acquisitions Ltd & Ors

Myers & Anor v Kestrel Acquisitions Ltd & Ors

The amendments to the VLNI postponing redemption and subordinating the VLNs to further indebtedness were valid modifications within the scope of clause 9.1.2; no implied good faith term or threshold requirement applies; ICA does not prevent subordination; Kestrel and Kestrel Holdings are balance-sheet insolvent under section 123 of the Insolvency Act 1986.

Parties
Claimant: Dennis Edward Myers; Claimant: Patricia Ann Myers; Defendant: Kestrel Acquisitions Limited; Defendant: Kestrel Holdings Limited; Defendant: Indigo Capital Partners Limited; Defendant: Indigo Capital IV SARL; Defendant: Indigo Capital IV LP; Defendant: Alchemy Partners Nominees Limited; Defendant: Alchemy Partners (Guernsey) Limited; Defendant: Swift Advances PLC
Jurisdiction
England and Wales
Judgment Date
31 March 2015
Procedural Posture
Part 8 Claim / Judgment After Trial
Outcome
Declaratory relief granted reflecting findings on validity of modifications and insolvency.
Legal Topics
Implied Terms, Modification of Loan Instruments, Subordination of Debt, Balance Sheet Insolvency, Declaratory Relief
Contract Law Insolvency Law Company Law Implied Terms Modification of Loan Instruments Subordination of Debt Balance Sheet Insolvency Declaratory Relief

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Parties

Dennis Edward Myers

Claimant

Patricia Ann Myers

Claimant

Kestrel Acquisitions Limited

Defendant

Kestrel Holdings Limited

Defendant

Indigo Capital Partners Limited

Defendant

Indigo Capital IV SARL

Defendant

Indigo Capital IV LP

Defendant

Alchemy Partners Nominees Limited

Defendant

Alchemy Partners (Guernsey) Limited

Defendant

Swift Advances PLC

Defendant

Procedural Posture

Part 8 Claim / Judgment After Trial

Legal Issues

  1. 1 Whether amendments to Vendor Loan Note Instrument (VLNI) subordinating and postponing redemption of VLNs were valid modifications under clause 9.1.2
  2. 2 Whether a good faith term or threshold requirement should be implied into the VLNI
  3. 3 Whether the ICA prevents subordination of VLNs

Ratio Decidendi

The amendments to the VLNI postponing redemption and subordinating the VLNs to further indebtedness were valid modifications within the scope of clause 9.1.2; no implied good faith term or threshold requirement applies; ICA does not prevent subordination; Kestrel and Kestrel Holdings are balance-sheet insolvent under section 123 of the Insolvency Act 1986.

Court Disposition

Declaratory relief granted reflecting findings on validity of modifications and insolvency.

Orders

  • Declarations that amendments to VLNI postponing redemption and subordinating VLNs are valid modifications under clause 9.1.2.
  • Declaration that Kestrel and Kestrel Holdings are balance-sheet insolvent under section 123 of the Insolvency Act 1986.