8 décembre 2022
R&I Update - December 2022 – 1 de 3 Publications
In ABT Auto Investments Ltd v AAPICO Investment Pte Ltd and others , the Court considered the duty to carry out a valuation "in a commercially reasonable manner" in the context of appropriation: an enforcement remedy that allows a lender to take (or appropriate) a secured asset (financial collateral) at a price determined by an agreed valuation process, in reduction of the secured debt.
ABT gave Aapico guarantees and a charge over shares ABT held in a joint venture company as security for monies loaned by Aapico. Following non-payment by ABT, Aapico appropriated ABT's shares at a valuation of USD 27 million.
ABT claimed that the appropriation was invalid because the valuation was not carried out in a "commercially reasonable manner" as required by the Financial Collateral Arrangements (No 2) Regulations 2003.
A right of appropriation may be an advantageous form of security, providing for a quicker and simpler enforcement route than others. The appropriation will not necessarily be void even if the valuation is successfully challenged. The factors considered by the Court here could apply to Part 26A restructuring plan valuations too.
To discuss the issues raised in this article in more detail, please contact a member of our Restructuring and Insolvency team.
8 December 2022
par Lorna Bramich
8 December 2022
par Ralf van der Pas
6 December 2022
par Lorna Bramich et Emma Allen
par Lorna Bramich et Emilie Kennedy
par Lorna Bramich et Jennifer Gregor