Re Swissport Fuelling Ltd

The company applied under section 896 of the Companies Act 2006 for an order convening a meeting of its scheme creditors to consider a scheme of arrangement which would permit the Group to raise a "New Money Facility" ranking ahead of existing senior debt. The court held that the convening hearing should be allowed and a single class of scheme creditors (the lenders under the Credit Agreement) be convened.

The judge found no jurisdictional roadblocks: the proposed scheme fell within section 895 as an arrangement altering contractual voting thresholds; the Company (an English-registered guarantor) had executed a deed of contribution to ensure a ricochet claim and to secure the court's jurisdiction; and expert evidence indicated likely recognition in the United States under Chapter 15 and no obvious problems in Switzerland or Luxembourg. The Practice Statement and authorities supported short notice in the urgent commercial circumstances and the use of a virtual meeting. The court also granted a declaration appointing a company director as the Company’s foreign representative for Chapter 15 purposes.

The applicant, Swissport Fuelling Limited, applied for an order under section 896 of the Companies Act 2006 to convene a meeting of scheme creditors to consider a scheme of arrangement. The purpose of the proposed scheme was to permit the Group to raise up to 0380 million of new super-senior financing to address an urgent liquidity crisis caused by the Covid-19 pandemic and to facilitate a wider restructuring. The scheme, limited to lenders under a principal Credit Agreement governed by New York law, would operate by appointing the Company as attorney for those creditors to give written consent to amendment agreements to the Credit Agreement and the Intercreditor Agreement.

Background and parties:

• The Company is a guarantor in a Group financing structure comprising a Credit Agreement, senior secured notes, senior unsecured notes and an intercreditor agreement. The Credit Agreement comprises three facilities with differing rates and maturities and is governed by New York law.
• The Group faced a severe liquidity shortfall by July/August 2020 and sought new lending on super-senior terms; consent of Credit Agreement lenders was required to create that ranking.

Procedural posture and issues:

• This was a convening hearing under section 896 to determine whether to order meetings of scheme creditors and whether the proposed class composition and procedure were appropriate, not a full consideration of scheme merits.
• Key issues were class composition (whether the Credit Agreement lenders should form a single class), jurisdictional questions (whether the scheme constituted an arrangement under section 895; whether the English court had territorial and international jurisdiction and whether the scheme would be effective internationally), adequacy of notice and timing, conduct of a virtual meeting, and the appointment of a foreign representative for US recognition.

Court's reasoning and subsidiary findings:

• Class composition: the lenders' rights were substantially the same (same security package and ranking), the scheme would affect them equally, differences in interest rates and maturities were insufficient to fracture the class, fee arrangements and potential underwriting fees did not justify separate classes.
• Jurisdiction and scope: the proposed amendments to voting thresholds and other contractual terms constituted an "arrangement" under section 895; schemes can affect third-party rights and releases of guarantees are permissible; the Company had executed a deed of contribution making it a primary obligor and ensuring the availability of English jurisdiction.
• International effectiveness: expert evidence supported likely recognition in the United States under Chapter 15 and there was no apparent roadblock in Switzerland or Luxembourg; Article 8 of Regulation EU 1215/2012 and authority permitted jurisdiction where at least one scheme creditor is domiciled in England.
• Practical matters: shorter-than-usual notice was justified by urgency and creditor sophistication; the timetable for circulation, proxy deadline and meeting date was appropriate; virtual meetings by webinar were acceptable provided the court is given information at sanction stage about creditor participation.

Relief granted: the court ordered that meetings be convened in a single class, authorised the proposed timetable and method of notice and meeting (including virtual conduct), and declared that a named director is the Company's foreign representative for Chapter 15 recognition.

The court allowed the application to convene a meeting of the scheme creditors, directing that the lenders under the Credit Agreement be treated as a single class and approving the proposed timetable and virtual meeting arrangements. The court concluded there were no jurisdictional 'roadblocks' (the proposed scheme fell within s.895, the Company had executed a deed of contribution to secure jurisdiction, and expert evidence supported likely international effectiveness) and granted a declaration appointing the Company director as foreign representative for Chapter 15 recognition.