“An Extraordinary Resolution shall be binding on all the Noteholders, whether or not present at the meeting, and each of them shall be bound to give effect to it accordingly. The passing of such a resolution shall be conclusive evidence that the circumstances justify its being passed. The issuer shall give notice of the passing of an Extraordinary Resolution to Noteholders within 14 days but failure to do so shall not invalidate the resolution.”
“24.2. The court may give summary judgment against the claimant or defendant on the whole of a claim or on a particular issue if - (a) it considers that – ... (ii) that defendant has no real prospect of successfully defending the claim or issue; and (b) there is no other compelling reason why the case or issue should be disposed of at a trial.”
“Power to strike out a statement of case 3.4 (1) In this rule and rule 3.5, reference to a statement of case includes reference to part of a statement of case. (2) The court may strike out a statement of case if it appears to the court (a) that the statement of case discloses no reasonable grounds for bringing or defending the claim….”
“It is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent’s case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant’s case is bad in law, the sooner that is determined, the better.”
“It is important that a judge in appropriate cases should make use of the powers contained in Pt 24. In doing so he or she gives effect to the overriding objectives contained in Pt 1. It saves expense; it achieves expedition; it avoids the court’s resources being used up on cases where this serves no purpose, and I would add, generally, that it is in the interests of justice. If a claimant has a case which is bound to fail, then it is in a claimant’s interest to know as soon as possible that that is the position. Likewise, if a claim is bound to succeed, a claimant should know that as soon as possible.”
“On28 December 2007 , pursuant to powers reserved in the terms and conditions, the Trust Deed and the Agency Agreement, Imcopa C was substituted for Imcopa U as the Issuer.”
“The substitution took place without reference to or consent of the Noteholders.”
“The Trustee may, without the consent of the Noteholders, agree to the substitution of the Issuer’s successor in business or any Subsidiary of the Issuer or the Guarantor or its successor in business ... in place of the Issuer ... as a principal debtor under this Trust Deed and the Notes.”
“... Imcopa C became contractually responsible to the Noteholders for compliance with the obligations of the Issuer but Imcopa U was not itself discharged from its own responsibility up to the date of substitution.”
“Release of Substituted Issuer or Substituted Guarantor: An agreement by the Trustee pursuant to Clause 13.2 will, if so expressed, release the Issuer or the Guarantor (or a previous substitute of either of them) from any or all of its obligations under this Trust Deed and the Notes. Notice of the substitution will be given to the Noteholders within 14 days of the execution of such documents and compliance with such requirements.”
“Only the Trustee may enforce the provisions of the Notes or this Trust Deed and no Noteholder shall be entitled to proceed directly against the Issuer or the Guarantor unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing.”
“(a) It shall have been so directed by an Extraordinary Resolution or so requested in writing by the holders of at least one-fifth in the principal amount of the outstanding Notes and (b) it shall have been indemnified and/or secured to its satisfaction against all liabilities, proceedings, claims and demands to which it may thereby become liable and all costs, charges and expenses which may be incurred by it in connection therewith.”
“No person shall have any right to enforce any term or condition of the Notes underContracts (Rights of Third Parties) Act 1999 .”
“It is further observable that the special provisions to be made in favour of the Trust were prominently referred to in the notice convening the meeting and were part of the scheme submitted to the meeting. At the meeting the scheme was, in fact, approved by the requisite majority. But the Trust, in respect of its holding of£47,500 , and also the holders of the further£2,500 guaranteed by the Trust, voted in favour of the scheme, and it is clear that but for the fact that the Trust voted in favour of the scheme the resolution adopting it would not have been carried by the requisite majority. Under these circumstances the plaintiff contends that the resolution is not binding on her, notwithstanding the provisions of the trust deed, because, she says, the company procured it to be passed by bribing the Trust. It appears to me that the term ‘bribery’ cannot be used appropriately in connection with this case. The powers conferred by the trust deed on a majority of the debenture-holders must, of course, be exercised bona fide, and the Court can no doubt interfere to prevent unfairness or oppression, but, subject to this, each debenture-holder may vote with regard to his individual interests, though these interests may be peculiar to himself and not shared by other debenture-holders ... A secret bargain by one debenture-holder for special treatment might be considered as corrupt and in the nature of bribery, but, in my opinion, there can be no question of bribery where a scheme openly provides for the separate treatment of persons with special interests. The only question is whether these persons are incapacitated from voting on the scheme, and I can see no grounds in equity for so holding.”
“It was there held that while the power conferred by a trust deed to a majority of debenture holders to bind a minority must be exercised bona fide, and while the Court has power to prevent some sorts at least of unfairness or oppression, a debenture holder may, subject to this, vote in accordance with his individual interests, though these may be peculiar to himself and not shared by other members of the class. It was true that a secret bargain to secure his vote by special treatment might be treated as bribery, but were the scheme to be voted upon itself provides, as it did in that case, openly the special treatment of a debenture holder with a special interest, he may vote inasmuch as the other members of the class had themselves known from the first of the scheme. Their Lordships think that Parker J accurately applied his judgment on the law on this point.”
“Mr John R Booth’s vote was necessary in order to gain the required majority of bondholders and it was secured by a promise to give him$2,000,000 of the ordinary stock of the Nickel Corporation. This stock was at the time of little value, but it was evidenced that if the price of nickel rose it might become of value. The promise to Mr. Booth was made seven months before the new scheme was submitted to the bondholders, ... at the trial in the Supreme Court of Ontario, Kelly J. held that what was really done was that the majority at the meeting did not act in the bona fide exercise of their rights which the majority might exercise, but in consideration of what would benefit Nickel Corporation and the personal interests of those votes were to be secured. The vote had been influenced by special negotiations in advance of the meeting.”
“The Lordships are of the opinion that judgment was rightly given to the respondents in this appeal. In the first place, it is plain, even from his own letters, that before Mr J. R. Booth would agree to the scheme of 1921, his vote had to be secured by the promise of$2,000,000 ordinary stock of Nickel Corporation. No doubt he was entitled in giving his vote to consider his own interests. But as that vote had come to him as a member of a class, he was bound to exercise it with the interests of the class itself kept in view as dominant. It may be that, as Ferguson J.A. thought, he and those with whom he was negotiating considered the scheme the best way out of the difficulties with which the Corporation was beset, but they had something else to consider in the first place. Their duty was to look at the difficulties of the bondholders as a class, and not to give any one of these bondholders a special personal advantage, not forming part of the scheme to be voted for in order to induce him to assent.”
“... where the scheme to be voted upon itself provides, as it did in that case, openly for special treatment of a debenture holder with a special interest, he may vote, inasmuch as the other members of the class had themselves known from the first of the scheme.”
“If the holder of a substantial block of the class concerned is offered an inducement to support the scheme, this may well make the purported approval void, unless it is disclosed to the other members. If full disclosure is made, the court will, in appropriate circumstances, approve the scheme and even allow the votes of the person concerned.”
“The fact that the offer in this case is one made publicly to all voters on the same terms that each bondholder is free to accept or reject it precludes, in my opinion, a conclusion that it disenfranchises any voter or group of voters (although the same could not perhaps be said were the offer of consideration in exchange for a bondholder’s vote not made to all bondholders on the same terms).”
“For example, had Eastern not made its offer to all bondholders on the same terms, but had it privately paid money to sufficient holders to carry the election, one would no doubt more feel some confidence in concluding provisionally at least, that such conduct was so inconsistent with the concept of voting implied by the amendment provision that it constituted a violation of what must have been the reasonable expectation on the contracting parties.”
“A consent solicitation is a debt restructuring mechanism pursuant to which the issuer solicits consents from its bondholders to the adoption of amendments to the indenture governing the issuer’s debt securities. This is often done in exchange for the issuer’s payment to consenting bondholders of a consent fee or other form of consideration.”
“Consent solicitations typically involve the payment of cash or other forms of consideration by the issuer to its bondholders in exchange for their consent to proposed amendments to the governing indenture. Although such consent payments have been challenged as a form of ‘vote-buying,’ violative of public policy and in breach of an implied duty of good faith and fair dealing, it is well established that such payments, within certain limits, are permissible.”
“In response to the allegations of “vote buying” and a breach of an implied duty of good faith and fair dealing, the court in Kass emphasized that had Eastern not made a solicitation offer to all bondholders on the same terms, but rather had paid privately paid money to a sufficient number of holders to ensure adoption of the proposed amendments, a different result would likely have been reached. The validity of consents obtained as a result of offering disparate amounts or a form of consideration to bondholders or consideration offered to some but not all bondholders is therefore subject to question.”