Representation of Investkredit Funding Limited [2012] JRC 121 (18 June 2012)

Representation of Investkredit Funding Limited [2012] JRC 121 (18 June 2012)

The Court held that the ultimate beneficial owners of the bonds, not the registered holder (Clearstream), are the proper creditors entitled to vote on the scheme of arrangement. As all Bondholders share the same economic interest, only one class meeting is required. The proposed notification procedures are sufficient to ensure Bondholders are informed and able to participate.

Citation
[2012] JRC 121
Parties
Company: Investkredit International Bank plc; Parent Company: Investkredit Bank AG; Direct Creditor/depository: Clearstream Banking AG; Ultimate Beneficial Owners/creditors: Bondholders
Jurisdiction
Jersey
Judgment Date
18 June 2012
Procedural Posture
Scheme of Arrangement / Directions Hearing for Convening Creditors' Meeting
Outcome
Directions granted for convening a single meeting of Bondholders to consider the scheme of arrangement.
Legal Topics
Schemes of Arrangement, Bondholder Rights, Class Meetings, Notice to Creditors
Company Law Insolvency Law Schemes of Arrangement Bondholder Rights Class Meetings Notice to Creditors

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Parties

Investkredit International Bank plc

Company

Investkredit Bank AG

Parent Company

Clearstream Banking AG

Direct Creditor/depository

Bondholders

Ultimate Beneficial Owners/creditors

Procedural Posture

Scheme of Arrangement / Directions Hearing for Convening Creditors' Meeting

Legal Issues

  1. 1 Who is entitled to vote on a scheme of arrangement where bonds are held through a global note and intermediaries?
  2. 2 Whether separate class meetings of creditors are required in this context?
  3. 3 What are the appropriate notification procedures for beneficial bondholders?

Ratio Decidendi

The Court held that the ultimate beneficial owners of the bonds, not the registered holder (Clearstream), are the proper creditors entitled to vote on the scheme of arrangement. As all Bondholders share the same economic interest, only one class meeting is required. The proposed notification procedures are sufficient to ensure Bondholders are informed and able to participate.

Court Disposition

Directions granted for convening a single meeting of Bondholders to consider the scheme of arrangement.

Orders

  • One meeting of Bondholders to be convened.
  • Notice to be given via Clearstream, publication in specified newspapers, and stock exchange announcements.