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In the Matter of Apcoa Parking Holdings GmbH and Others v In the Matter of
the Companies Act 2006
Case Nos: 2266/2014
2271/2014
2273/2014
2317/2014
2219/2014
2320/2014
2326/2014
2327/2014
2328/2014
High Court of Justice Chancery Division
14 April 2014

[2014] EWHC 1867 (Ch)

2014 WL 2530822
Before: The Honourable Mr Justice Hildyard
Monday 14th April 2014

Representation
Mr Barry Isaacs QC and Mr Adam Goodison (instructed by Clifford Chance LLP ) appeared on
behalf of the Applicant Scheme Companies.
Mr Simon Mortimore QC (instructed by Kirkland & Ellis International LLP ) appeared on behalf
of Centerbridge Partners, L.P. and Centerbridge Partners Europe, L.P..

Judgment
Mr Justice Hildyard:
1 The application is for orders to sanction nine schemes of arrangement proposed pursuant to
Part 26 of the Companies Act 2006 .
2 On 26th March 2014, I heard applications at an earlier stage in the same proceedings for
orders to convene scheme meetings for the purpose of considering and approving the schemes
of arrangement, and I gave directions in that regard as to the constitution of the classes and as to
the conduct of the meetings required.
3 In the extempore judgment which I gave on that occasion I set out what appeared to me to be
the salient background against which the applications have been presented and I need not, I
think, repeat that here. This judgment should be read together with that previous judgment
([2014] EWHC 997 (Ch)).
4 The only overriding point that I should perhaps emphasise, which I did draw attention to on the
previous occasion, is that each of these schemes is of limited scope, devoted only to dealing with
the imminent threat to the companies concerned, constituted by the fact that a termination date in

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respect of the facilities on which the group relies is fast approaching. I am informed, and have no
reason to think otherwise, that if an extension is not sanctioned, the board of the ultimate parent
company (which is incorporated in Germany) would be required to file German insolvency
proceedings in respect of the main holding company, and this would precipitate further
insolvency proceedings along the line. All this would be ultimately destructive of value when
compared to what might be achieved by a consensual reconstruction, or some other form of
reconstruction, if time is made available for that purpose by an extension of the termination date.
5 On the previous occasion, I emphasised that it was not appropriate for me at that time to delve
into the fundamental fairness of the scheme. On that previous occasion, and in accordance with
the usual practice, the matters which I had to consider were the proper composition of the
classes, the rules to determine how the meetings should be conducted, and any jurisdictional
issues which then seemed to arise and were such as to make it likely that whatever might be the
result of the scheme meetings, the scheme itself would not be able to achieve the purposes for
which it was promulgated because of some jurisdictional impediment or some problem in giving
effect to any order that this court made by reason of the cross-border elements concerned.
6 Given what I described in my previous judgment as rumblings of discontent from certain other
creditors, I had envisaged that the decisions that I made on that previous occasion, especially in
relation to the cross-border aspects of the schemes, might well be contested at this stage by at
least two creditors who had demonstrated some concern in this regard. In the event, however, no
such objection has been forthcoming.
7 In the circumstances, my task today is really, first, to consider how the class meetings were
conducted and their results. Second, to consider whether at those class meetings some
conflicting interest, which perhaps was overlooked, or subsequently emerged, might upset the
court's satisfaction with the process adopted. Third, to consider any opposition. Fourth, to
consider the matter of overall fairness and whether there was any blot such as to invalidate the
scheme. Fifth, in light of its novelty, I revisit the issue as to the jurisdiction of the court, given that
the connection with English law and this jurisdiction depends upon a change of law clause in a
facilities agreement previously governed by another law.
8 I can deal with the first matter quickly. Especially since no new point has been raised, it would
be unusual for me to revise or review my decision on the proper constitution of classes for each
of the scheme companies, and I do not intend to do so. It seems to me now, as it seemed to me
then, that the class composition was such as to enable those concerned, notwithstanding their
different rights in point of priority, to commune together and discuss the matter with a view to
their common interest; and that view appears to have been confirmed by this: that there was no
opposition at the meetings concerned. None of the creditors has raised any objection. In each
case the single class meeting directed endorsed the scheme with healthy, in fact extremely
impressive, majorities. A very high proportion of creditors attended or voted, and a very high
percentage of those who did were in favour in each case. There were some abstentions from one
lender only but there were no votes against. This is on any view a resounding endorsement of
the schemes of arrangement, which in each case is for the narrow purpose I have described.
9 So far as the question of any conflicting interests is concerned, I mentioned that, at least in
part, to prompt Counsel on this essentially unopposed matter to alert me to anything which might
have been considered a conflicting interest. Mr Isaacs QC has taken on board that implied
invitation and has confirmed to me that so far as he and Mr Goodison (who appeared with him)
are aware, and so far as those instructing him are aware, there is none.
10 I have already mentioned the third matter, the question of opposition there is none.
11 I therefore must focus on the overall fairness of the scheme and consider whether there is any
blot, by reference to what I have already mentioned or otherwise, against sanction, that the court
did not address its mind to the relevant circumstances and considerations.
12 So far as the overall fairness of the scheme is concerned, the court accepts that in ordinary
cases, unless there is some conflicting interest or some overarching improper purpose, the view
of the majority of creditors, especially where they are sophisticated and carefully advised, is likely
to be a more accurate litmus test of the business advisability of what is proposed than the court
can attempt. The statement as to what is required of the court on this occasion and in this context
is described in the decision of Mrs Justice Arden (as she then was) in the case of Re Hawk

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Insurance Company Ltd [2001] 2 BCLC 480 at page 483 from D to G, quoting a passage from
Buckley on the Companies Act which was approved by Mr Justice Plowman in Re National Bank
Ltd [1966] 1 WLR 819 . (Mrs Justice Arden's decision in Re Hawk was reversed, but her approval
of the passage in question stands.) The passage is as follows: Function of the court. In
exercising its power of sanction the court will see, first, that the provisions of the statute have
been complied with, secondly, that the class was fairly represented by those who attended the
meeting and that the statutory majority are acting bona fide and are not coercing the minority in
order to promote interests adverse to those of the class whom they purport to represent, and
thirdly, that the arrangement is such as an intelligent and honest man, a member of the class
concerned and acting in respect of his interest, might reasonably approve. The court does not sit
merely to see that the majority are acting bona fide and thereupon to register the decision of the
meeting; but at the same time the court will be slow to differ from the meeting, unless either the
class has not been properly consulted, or the meeting has not considered the matter with a view
to the interests of the class which it is empowered to bind, or some blot is found in the scheme.
13 This test is sometimes expressed as being the man of business' or the majority of the
Regiment test. The court will, as I say, ordinarily accept the commercial judgment of the majority
of creditors as men of business, and will not demur from the step of the Regiment, unless it is
persuaded that the constitution of the classes was flawed, or that those voting were materially
misled or given inaccurate or deficient information. I see no reason to do anything in this case
other than confirm and accept the view of the very considerable majority.
14 So far as whether there is any blot on the scheme, again this is a matter which Counsel
putting forward the scheme will naturally have considered. It has not been suggested to me, and I
have not myself seen, any such blot as would encourage me to refuse sanction.
15 Accordingly, if this were a domestic scheme, I should have no hesitation in giving sanction to
it.
16 The final question which I need to consider, as I have stated earlier, and as I emphasised on
the previous occasion, is whether there is some jurisdictional impediment because of the
cross-border context in which the scheme is put forward. In that context, I feel I should,
notwithstanding that I addressed it in part on the previous occasion, revisit the issue to make
sure in my own mind that there is jurisdiction in the court, which would be recognised in the
relevant other jurisdictions, to do what I am asked to do. That is also necessary to reassure other
jurisdictions as to the careful scrutiny afforded to the schemes and so that it cannot be said,
either here or abroad, that the court did not address its mind to the relevant circumstances and
considerations.
17 That context, and the concern to which it gives rise, can, I think, be described as being this:
seven of the nine scheme companies are companies or bodies incorporated under another
jurisdiction, and not this jurisdiction, and each has its centre of main interest or COMI in another
country and not this country. The only real connection with this country, with regard to those
seven scheme companies, is the selection of this country's laws pursuant to a change of law
clause in the facilities agreement governing the indebtedness of the scheme companies. The
question is whether a sufficient connection with this jurisdiction has been established. I also need
to consider whether there is anything, whether in point of recognition, or the Judgments
Regulation, the Insolvency Regulation, or otherwise, which might render likely to be ineffective
anything this court does.
18 As I sought to explain in my previous judgment, the jurisdiction (in the narrow sense) of this
court seems to me to be confirmed by the analysis in Re Drax Holdings Ltd [2004] 1 WLR 1049 ,
which was adopted in Re Rodenstock GmbH [2011] EWHC 1104 and applied in a variety of
cases which have followed in quite quick succession since. It is clear that the test is whether the
companies could be wound up in this jurisdiction. The answer to that test is that, notwithstanding
the Insolvency and Judgments Regulations , they could be, but that the court would not do so
except if it were persuaded that there were sufficient contacts with this jurisdiction such as not to
render it inappropriate or exorbitant for it to do so. The second part of the test, relating to what I
described as jurisdiction in the wider sense, is whether the connections are sufficient to ensure
that the exercise of jurisdiction would not be exorbitant or inappropriate or contrary to
international comity.
19 Subject to two points or caveats, this case is in line with the sequence of cases starting with

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Re Drax and Re Rodenstock which I have described. I should acknowledge that in Re

Rodenstock , which was really the first of the cases which considered this sort of extraterritorial
effect scheme of arrangement, Mr Justice Briggs, as he then was, regarded the combined effect
of the majority of creditors being domiciled here and their relationships being exclusively
governed by English law, with an English jurisdiction selection, and felt there was only a narrow
balance in favour of the exercise of jurisdiction. But as time has moved on, the court has been
prepared to accept the choice of English law and the English forum as capable of constituting
sufficient connections with this jurisdiction even without the comfort of the majority of creditors
being present here, provided that it is also persuaded that the countries in the jurisdictions where
the creditors would otherwise have been likely to seek enforcement would recognise the
effectiveness of the English court order. That is illustrated in Re Primacom Holdings [2011]
EWHC 3746 (Ch) and [2012] EWHC 164 (Ch), Re NEF Telecom B.V. [2012] EWHC 2944 (Ch),
Re Vietnam Shipbuilding Industry Groups [2013] EWHC 2476 (Ch) and Re Magyar Telecom B.V.
[2013] EWHC 3800 (Ch).
20 The first point or caveat that I mentioned, which I also addressed on the previous occasion,
and which I think is a novel and important point which did not arise in any of the cases cited, is
that in this case both the choice of English law and the selection of the English courts as having
exclusive jurisdiction were not the original choice in the facilities agreement. Those choices have
been introduced late in the day by force of a provision under the relevant agreement, enabling
the creditors to select a different jurisdiction, in this case England, and a different governing law,
in this case English law, than originally applied to their lending relationship.
21 As I say, that is a novel point and it has occasioned expert evidence in order to reassure the
court, or to confirm to it, that the original change of law and jurisdiction is in accordance with the
laws then governing those instruments, as well as being consistent with English law. In that
context, in each of the jurisdictions concerned, an expert has given a view, which I think I can
summarise as being this: that though there is no case in any of the jurisdictions which expressly
confirms the propriety and effectiveness of the change made, nevertheless none considers that it
would be ineffective; and with varying degrees of emphasis each is of the view that, on the
contrary, the changes would be effective and given recognition.
22 I was originally concerned whether a proper and sufficient explanation of the precursor to all
of this, which was a change in the governing law and jurisdiction law to England, in the case of
each of the companies, had been provided prior to the meetings at which the changes were
resolved. But I am satisfied pursuant to the further evidence as to the manner in which creditors
were notified on the telephone, that there is no basis for my refusing to give sanction on that
ground. I am comforted in that conclusion by the fact that, in the event, no creditor has suggested
that it was not properly advised as to the reasons for and effect of the changes.
23 The second point with which I was also concerned was lest the adoption of English law and
jurisdiction, and the promulgation of a scheme under the Companies Act 2006 might be said to
deprive creditors of an essential part of their bargain: that is, that the termination date should not
be altered except by unanimous consent. But, as it seems to me, the provision for change of law
qualified that bargain, enabling it to be glossed by provisions of the newly adopted law, provided
that the change of law and jurisdiction was properly explained and valid and effective under the
original law. Again, I am comforted in my conclusion that the provision for unanimous consent
does not preclude altering the termination dates by dint of a scheme by the facts that (a) no
creditor has sought to contend to the contrary and (b) the experts consider that the changes
would be effective under the original governing law.
24 I should perhaps, and for comprehensiveness, mention that I have also considered a question
that is not without its difficulties, which is as to the possible application of Article 2 of the
Judgments Regulation. That question has been addressed in the sequence of cases to which I
have referred; but a conundrum remains as to whether it applies at all. The easiest answer, if
available, would be that the Judgments Regulation has no effect because there is simply nothing
which triggers it on the basis that there is no lis in the proceedings. That was the view that I was
inclined to provisionally in Re Primacom , but Mr Justice David Richards has rightly cautioned
that there may be an autonomous European meaning which would have to be considered before
that easy answer could safely be adopted. However, it is once again unnecessary to resolve the
conundrum. Even if one proceeds upon the footing that Article 2 of the Judgments Regulation is
otherwise applicable, the exceptions to its requirement for a person domiciled in a Member State
to be sued there is subject to exceptions in Article 23 (which applies where there is an exclusive

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jurisdiction clause) and Article 24 (where there has been a submission to the jurisdiction).
Accordingly it appears to me that on one or more of the variety of grounds identified in Re
Primacom and the subsequent cases, and again with the comfort that the experts, albeit with
varying degrees of emphasis, have all confirmed that the scheme would, if sanctioned in
England, be given effect in their own jurisdictions, there is no problem in terms of the Judgments
Regulations such as to cause me to decline sanction.
25 To summarise my views on the jurisdictional issues, I have concluded that the combination of
the fact that: (a) the facilities agreement is now (albeit pursuant to a change of law clause)
governed by English law, (b) subject to one small issue, the creditors have selected the English
court as having exclusive jurisdiction, and (c) the court has been provided with independent
experts' opinions confirming that the courts in the jurisdiction where the creditors would have
otherwise been likely to seek enforcement would indeed be likely to recognise the effectiveness
of the orders if made, is sufficient to warrant the exercise of jurisdiction and the expectation that
such exercise will be effective, given (of course) that I am otherwise satisfied that the schemes
are fair and the relevant requirements of English law have been satisfied.
26 Accordingly, though the point they raise is a novel one, I think ultimately the schemes
proposed fall into line with the sequence of cases to which I have referred. Although I
acknowledge, as Mr Justice Vos emphasised in I think it was NEF Telecom B.V. [2012] EWHC
164 , that where there is no contest the court can only do its best on the basis of the material
which is offered by one side, and all (I think) of the cases were effectively decided ex parte, I see
no reason to depart from that line.
27 In conclusion, I am satisfied on each of the matters which I have considered myself bound to
assess, and I therefore sanction each of the schemes. I will consider the terms of the orders with
Counsel.
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