SMP Trustees Ltd, Re [2012] EWHC 772 (Ch) (27 March 2012)

SMP Trustees Ltd, Re [2012] EWHC 772 (Ch) (27 March 2012)

Clause 13.1 of the Trust Deed empowers SMP Trustees Limited to amend the Trust Deeds to enter into the controlled liquidation protocol, as the amendments are not materially prejudicial to bondholders and are overwhelmingly supported; court blesses the exercise of this power and authorises SMP to proceed.

Citation
[2012] EWHC 772 (Ch)
Parties
Claimant: SMP Trustees Limited; Issuer: Lifemark SA; Bondholder: Financial Services Compensation Scheme; Bondholder: Yorkshire Building Society; Original Bondholder: Keydata Nominees Limited; Distributor: Keydata Investment Services Limited; Swap Counterparty: Société Européenne de Banque S.A.; Common Depositary: BNP Paribas Securities Services Luxembourg
Jurisdiction
England and Wales
Judgment Date
27 March 2012
Procedural Posture
Trustee Directions Application / Final Order Granted, Partial Adjournment
Outcome
application granted in part, directions given, further issues adjourned
Legal Topics
Trustee Powers, Bondholder Meetings, Controlled Liquidation, Protocol Amendment, Trust Deed Modification
Trusts Insolvency Financial Services Trustee Powers Bondholder Meetings Controlled Liquidation Protocol Amendment Trust Deed Modification

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Parties

SMP Trustees Limited

Claimant

Lifemark SA

Issuer

Financial Services Compensation Scheme

Bondholder

Yorkshire Building Society

Bondholder

Keydata Nominees Limited

Original Bondholder

Keydata Investment Services Limited

Distributor

Société Européenne de Banque S.A.

Swap Counterparty

BNP Paribas Securities Services Luxembourg

Common Depositary

Procedural Posture

Trustee Directions Application / Final Order Granted, Partial Adjournment

Legal Issues

  1. 1 Can SMP Trustees Limited amend the Trust Deeds to enter into a controlled liquidation protocol?
  2. 2 Is the plenary bondholder meeting sufficient to authorise amendments affecting all bondholders?
  3. 3 Does section 57 Trustee Act 1925 apply or is clause 13.1 of the Trust Deed sufficient?

Ratio Decidendi

Clause 13.1 of the Trust Deed empowers SMP Trustees Limited to amend the Trust Deeds to enter into the controlled liquidation protocol, as the amendments are not materially prejudicial to bondholders and are overwhelmingly supported; court blesses the exercise of this power and authorises SMP to proceed.

Court Disposition

application granted in part, directions given, further issues adjourned

Orders

  • SMP Trustees Limited may amend the Trust Deeds to authorise entry into a controlled liquidation protocol with Lifemark liquidators.
  • SMP may enter into the protocol on terms it considers appropriate.