Hindelang and Concord Representation v [2001] JRC 245 (10 December 2001)

judgment the bailiff: 1. This is an application by the Viscount for directions pursuant to a Saisie Judiciaire which was issued on 8 th February, 2000, on the application of the Attorney General on behalf of the Attorney General of the United States of America. 2. As a result of the Saisie the realisable property of Paul Edward Hindelang was made subject to restraint. 3. This application arises in relation to part of the property which has been seized by the Viscount. The property is the share capital of Concord Property Investments Inc., (to which we shall refer as "Concord"). The sole asset of Concord, we are given to understand, is a loan made to Astrantia Limited now totalling £380,000. The loan was made in two tranches, the first loan of £200,000 being made in July, 1992, and the second tranche of £180,000 being made in August, 1996. The loans have been secured by charges on a freehold property in Lancashire owned by Astrantia Limited. There is an earlier charge on that property in favour of the Anglo Irish Bank in the sum of £1,180,559 as at th August, 2001. Valuations have been provided to the Viscount of the freehold property in Lancashire which indicate that Astrantia Limited is either insolvent, or close to insolvency. The Viscount has endeavoured to protect the interest of Concord and as a result of negotiations an offer has been made to pay £600,000 to the Viscount on certain terms. Those terms are that the existing loans will be varied in two respects. First, the rate of interest payable in future will be reduced from 5% above base rate to 2% above the LIBOR rate. Secondly, Concord would give up the existing arrangement to share in any net profit on the sale of the property. The existing arrangement is that Concord is entitled to the greater of either 50% of the loan at the date of sale or 30% of the net profit on the sale of the property. The total debt due to Concord as at 30 th November, 2001, is £836,479 made up of the original capital of £380,000 and outstanding interest of £456,479. Mr. Dessain, for the Viscount, has informed us that the Anglo Irish Bank is aware of this proposal and has consented to it. 4. Counsel submits that the proposal is in the interests of those for whom the Viscount is acting in that Concord has had the benefit of a commercially advantageous rate of interest on its loans for some years. Furthermore, there is no evidence that a sale at the instance of the owner is in prospect and if a sale did take place at the present time it would not yield a sufficient sum of money to cover all the existing loans and outstanding interest. The arrangement put forward by Astrantia Limited, which would necessarily involve an injection of capital by its shareholder or some other third party, gives rise to the hope that there will be a future further payment of capital and interest to Concord. 5. The Viscount has given notice to Messrs. Bailhache Labess acting for Thomas Batalla Esquivel, the principal beneficiary of the Concord Settlement, and to Advocate Clyde Smith representing Abacus (C. I.) Limited, which administers the Trust structure. Both rest upon the wisdom of the Court. We record also that a number of other potentially interested parties were notified at the time of the making of the Saisie Judiciaire on 8 th February, 2000, but none has expressed any interest in these proceedings. 6. In our judgment the proposal put forward by the Viscount is sensible and in the interests of those for whom the funds restrained under the Saisie Judiciaire are being held. We accordingly grant the prayer of the representation and direct and authorise the Viscount to accept the offer of £600,000 in full payment of interest and part payment of capital of the loan. We direct and authorise the Viscount to accept that offer on terms that the existing rate of interest to be applied to the remaining capital balance be fixed at 2% over LIBOR and that Concord should give up the profit sharing provision provided in the legal documents evidencing the loans. Concord will not, therefore, in future be entitled to participate in a share of the profits when the property is eventually sold. We also order that the Viscount's costs of and incidental to the application be paid on an indemnity basis out of the assets subject to the Saisie. No Authorities Page Last Updated: 19 Aug 2015 BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII