BTI 2014 LLC v Sequana S.A. & Ors [2017] EWHC 211 (Ch) (10 February 2017)

BTI 2014 LLC v Sequana S.A. & Ors [2017] EWHC 211 (Ch) (10 February 2017)

The appropriate remedy under section 423 is to require Sequana to pay to BTI the sums already paid by BAT and API towards the remediation of the Lower Fox River, and to remain liable for future costs up to the value of the May Dividend plus interest, with payments to be handled in accordance with the Funding Agreement. The court rejected Sequana's arguments that no remedy should be granted or that the remedy should be limited to restoring the inter-company debt, holding that such limitations would not meet the statutory objective of protecting the victims' interests. The court also determined the appropriate approach to currency conversion and interest calculation, favouring a pragmatic...

Citation
[2017] EWHC 211 (Ch)
Parties
Claimant: BTI 2014 LLC; Defendant: Sequana S.A.; Defendant: Antoine Courteault; Defendant: Pierre Martinet; Defendant: Clive Mountford; Defendant: Martin Newell
Jurisdiction
England and Wales
Judgment Date
10 February 2017
Procedural Posture
Civil / Judgment on Remedies Following Main Liability Judgment
Outcome
Claim for relief under section 423 in respect of the May Dividend succeeds; claim for relief in the Dividend Claim dismissed.
Legal Topics
Transactions at Undervalue, Remedies Under Insolvency Act 1986 S.423, Restorative Remedies, Dividends and Creditor Protection
Insolvency Company Law Transactions at Undervalue Remedies Under Insolvency Act 1986 S.423 Restorative Remedies Dividends and Creditor Protection

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Parties

BTI 2014 LLC

Claimant

Sequana S.A.

Defendant

Antoine Courteault

Defendant

Pierre Martinet

Defendant

Clive Mountford

Defendant

Martin Newell

Defendant

Procedural Posture

Civil / Judgment on Remedies Following Main Liability Judgment

Legal Issues

  1. 1 What is the appropriate remedy under section 423 of the Insolvency Act 1986 for a dividend paid with the purpose of prejudicing creditors?
  2. 2 Should the remedy be limited by subsequent changes in the parties' positions or agreements?
  3. 3 How should currency conversion and interest be handled in quantifying the remedy?

Ratio Decidendi

The appropriate remedy under section 423 is to require Sequana to pay to BTI the sums already paid by BAT and API towards the remediation of the Lower Fox River, and to remain liable for future costs up to the value of the May Dividend plus interest, with payments to be handled in accordance with the Funding Agreement. The court rejected Sequana's arguments that no remedy should be granted or that the remedy should be limited to restoring the inter-company debt, holding that such limitations would not meet the statutory objective of protecting the victims' interests. The court also determined the appropriate approach to currency conversion and interest calculation, favouring a pragmatic...

Court Disposition

Claim for relief under section 423 in respect of the May Dividend succeeds; claim for relief in the Dividend Claim dismissed.

Orders

  • Sequana to pay to BTI within 14 days the sum of $138.4 million (the Lump Sum) representing past remediation costs paid by BAT and API.
  • Sequana to remain liable to pay to BTI further sums up to a cap representing the amount of the May Dividend plus interest, with liability crystallising as and when BAT pays money to BTI under the Funding Agreement.