The claimants were a minority of a lending syndicate. A change to the terms of the syndication agreement had been proposed which they considered would prejudice them. Risks of the loan arrangement would be transferred to them.
Held: The change should proceed. It was necessary before any change was made that it should be demonstrated to be in the interests of the syndicate as a whole, not just the majority, but that did not mean it had to be for the benefit of each individual lender. Here there was nothing to suggest that the agents had acted in bad faith. All classes under the agreement had agreed to submit to the majority decision. Good faith was the starting point, and the overall agreement would be in the long term interes?s of the syndicate by reducing the borrowings.
Judges:
Rimer J
Citations:
Times 30-Jan-2003
Jurisdiction:
England and Wales
Citing:
Cited – British American Nickel Corporation Ltd v M J O’Brien Ltd PC 1927
(Canada) The Corporation had issued mortgage bonds secured by a trust deed giving power to a majority of the bondholders to bind the minority. The company proposed a restructuring scheme involving the replacement of these bonds by bonds of a . .
Cited – Greenhalgh v Alderne Cinemas Ltd 1951
The issue was whether a special resolution has been passed bona fide for the benefit of the company.
Held: The phrase, ‘the company as a whole,’ does not (at any rate in such a case as the present) mean the company as a commercial entity as . .
Lists of cited by and citing cases may be incomplete.
Financial Services, Banking
Updated: 21 June 2022; Ref: scu.178843
