Boies, Schiller & Flexner's London Office Wins Judgment For Canary Wharf Noteholders
LONDON, Jan. 28, 2016 /PRNewswire/ -- Boies, Schiller & Flexner's London office successfully obtained a judgment from the English High Court today on behalf of the holders of the Class A1 Notes issued by Canary Wharf Finance II Plc in connection with the issuer's obligation to make a "Spens payment" following an early partial redemption of the notes.
Boies, Schiller & Flexner was selected to represent the Class A1 Noteholders in August 2014. The noteholders were concerned by the issuer's position that no Spens payment was payable, following a partial redemption of the notes in June 2014 subsequent to the disposal of 10 Upper Bank Street (one of the properties in the underlying securitization portfolio). The issuer commenced proceedings before the Commercial Court seeking declarations that it was entitled to make both this voluntary disposal/redemption and any future voluntary disposals/redemptions without making a Spens payment. On the issuer's case, it would have been entitled to effectively redeem the long-dated Class A1 Notes at par in advance of maturity (2033), without making any form of make-whole to the noteholders, including to compensate them for lost interest payments.
The issuer initially refused to join the noteholders to the proceedings, forcing them to make a contested application. In October 2014, the court ordered that they be joined and made a representation order.
The trial took place before Justice Stephen Phillips in July 2015. In his judgment, Justice Phillips found in favour of the noteholders on all points, unequivocally rejecting the issuer's arguments, and finding that both the "clear and unambiguous language" of the relevant contractual documentation and the relevant commercial context supported the noteholders' case. As a result, an amount of £169 million plus accrued interest is payable by the issuer to the noteholders in connection with the disposal of 10 Upper Bank Street. The noteholders also expect the court to require the issuer to pay their costs of the first instance proceedings. The issuer, who is represented by Clifford Chance, has indicated that it intends to seek permission to appeal to the Court of Appeal.
"The case represents an important victory for the Class A1 Noteholders of Canary Wharf, demonstrating that the Issuer cannot avoid or structure around their obligations to make-whole where there has been an early voluntary redemption. We are delighted with the result and with the judgment, which is very strong indeed," said Natasha Harrison, Managing Partner of Boies, Schiller & Flexner's London office.
The case for the noteholders is being led by Ms. Harrison, assisted by counsel Fiona Huntriss and associate Melissa Kelley.
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