Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
With over 30 practice areas, we have all bases covered. Find out how we can help
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Regulatory, business information and analytics solutions that help professionals make better decisions
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Discuss the latest legal developments, ask questions, and share best practice with other LexisPSL subscribers
Can English schemes of arrangement be used to compromise non-English debt such as bonds governed by New York law with a non-exclusive jurisdiction clause in favour of New York of a foreign company?
Re Magyar Telecom BV  EWHC 3800 (Ch),  All ER (D) 20 (Dec)
The Companies Court sanctioned a scheme of arrangement in respect of a company, whose principal business was the operation of telecommunication services in Hungary, and whose principal liabilities arose under an issue of notes which were governed by the law of New York. The court held that the evidence established a sufficient connection with England and that the scheme would substantially achieve its purpose.
What did the court decide?
Mr Justice Richards decided that:
• an English scheme can compromise New York law governed bonds
• even though the governing law and exclusive jurisdiction clauses were not in favour of England (but rather New York), sufficient connection did exist because following the company's movement of its centre of main interests (COMI) to England, any insolvency process for the company would be undertaken under English law in England
• the Council Regulation EC No 44/2001 (the Judgments Regulation) does apply to schemes of insolvent companies
• the consent fee taken by certain creditors didn't create a separate class
• a scheme can release third parties (eg guarantors)
What issues were discussed by the court before reaching its decision?
Richards J discussed a number of issues before reaching his decision, including:
The notes were held in global form and so note holders were not strictly speaking creditors until the notes were registered in their names (ie definitised). However, they were treated as contingent creditors (note creditors) for the purposes of the scheme, and so creditors for the purposes of the Companies Act 2006, s 899.
High level of support
The judge noted the high level of support for the scheme from the creditors— it was approved by a majority of more than 97% in number representing more than 99% in value of
Access this article and thousands of others like it free by subscribing to our blog.
Read full article
Already a subscriber? Login
0330 161 1234