Swissport Fuelling Ltd, Re

At a scheme convening hearing, the court does not determine the merits or fairness of the proposed scheme. It should, however, identify any jurisdictional roadblock that would unquestionably prevent sanction. Creditors may vote as one class where their existing rights, treatment under the scheme and position in the relevant insolvency comparator are substantially the same. Differences in interest rates, maturities, adviser-fee arrangements or possible market-rate underwriting fees will not fracture a class where they do not create a material difference in interests. Amendments to consent thresholds may constitute an arrangement under the Companies Act 2006. A scheme may affect creditors’ rights against third-party obligors, and steps taken to establish jurisdiction are not abusive where they serve creditors’ interests.

Swissport Fuelling Ltd, an English company and guarantor within the Swissport Group, applied under section 896 of the Companies Act 2006 for an order convening a meeting of lenders under a credit agreement. The proposed scheme would amend the credit and intercreditor agreements to facilitate new super-senior borrowing during the Group’s urgent liquidity crisis and would also enable later restructuring steps.

The issues were whether the lenders should constitute one class, whether the proposals amounted to an arrangement, whether the scheme could affect rights against other obligors and whether there was any domestic or international jurisdictional roadblock. The court also considered notice, a virtual meeting and the appointment of a foreign representative.

1. Convening stage. The court ordered the meeting. A convening hearing is emphatically not concerned with the merits or fairness of the scheme. The court may nevertheless consider whether a jurisdictional roadblock would unquestionably lead to refusal of sanction: [23].
2. Class composition. The lenders were entitled to meet as a single class because their existing rights and security ranking were substantially the same, the scheme affected them in the same way, and the insolvency comparator placed them in materially the same position with a unity of interest: [31]-[32]. Differences in interest rates and maturities did not fracture the class. Nor did arrangements for adviser fees or possible participation in future new-money underwriting, since the latter was outside the scheme, could not presently identify a separate class, and would be on market terms without bounty: [34]-[39].
3. Arrangement and third-party rights. The amendments, including reduced future consent thresholds, involved sufficient give and take to constitute an arrangement under sections 895 and 896 of the Companies Act 2006: [40]-[41]. A scheme may affect creditors’ rights against third-party guarantors and obligors. The deed of contribution ensured a ricochet claim against the English company, and the court found no roadblock at the convening stage. It did not finally determine the wider argument concerning third-party releases: [47]-[53].
4. Jurisdiction. The court accepted that steps taken to attract English scheme jurisdiction were not abusive where they were in creditors’ interests. It agreed with the approach in Re DTEK Finance Plc and Re Lecta Paper UK Ltd that, assuming the Recast Judgments Regulation applied, Article 8 could confer jurisdiction where at least one scheme creditor was domiciled in England: [50]-[62].
5. Procedure. The urgent timetable and notice were adequate in the circumstances, having regard to the sophisticated creditors, the simplicity of the decision and the earlier circulation of the proposed amendments: [64]-[65]. A virtual meeting by webinar was permissible where creditors could come together and consult, subject to evidence at sanction concerning participation and fairness: [67]. A declaration was made validating the director’s appointment as foreign representative for Chapter 15 recognition proceedings: [68]-[69].