England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		The Rolls Building 7 Rolls Buildings Fetter Lane London, EC4A 1NL
		22 June 2017

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1. MR JUSTICE HILDYARD: I shall give an ex tempore judgment now which if necessary I shall wish to perfect and add to in due course. I do think it is important, particularly in the context of a cross-jurisdictional scheme such as this, that the court should explain why it is proceeding so that any other court can both understand the approach of the English Court and also can see and be reassured that the function of the court in the context of schemes is not a ministerial or rubber-stamping one; it is to consider the scheme diligently, and to seek to identify and address any 'blots' on the scheme and any jurisdictional or enforcement problems, whether or not the scheme is the subject of opposition.
2. As will be apparent from that introduction, this application seeks the sanction of the court under section 899 of the Companies Act 2016 for a scheme of arrangement proposed pursuant to section 895 of the same Act and the scheme raises cross-jurisdictional issues.
3. The application is made by the subject company, Algeco Scotsman PIK SA which I shall call "the Company". The company is part of the Algeco Scotsman Group which I shall call "the group", for which the holding company is Algeco Scotsman Holding S.à r.I. ("ASH"). The group is a leading global business service provider focussed on modular space, secure storage solutions and remote accommodations. The Company itself is not an operating company but a finance company within the group.
4. As may be apparent from its name, the Company was not incorporated in England or Wales: it is incorporated in the Grand Duchy of Luxembourg and it has its registered office in that member state of the European Union. It follows from that that the presumption is that its centre of main interest or COMI is in the Grand Duchy. Furthermore, according to the evidence:

(1) the principal discussions and negotiations between the Company and the PIK Lenders, its creditors, have taken place in England;

(2) on 14 and 17 April 2017 creditors and other counterparties to agreements with the Company were notified (by letter and through a website announcement) that Manor Drive, Peterborough, PE4 7AP, England is the address for correspondence with the Company;

(3) three of the four directors of the Company reside in England;

(4) the Company is UK resident for tax purposes;

(5) the Company has a non-officer employee based at the Group's UK headquarters in Peterborough, who is a reporting accountant for the Company and who, amongst other matters, liaises with the Administrative Agent, as representative of the PIK Lenders, in relation to matters under the PIK Loan Agreement;

(6) the Company occupies its UK headquarters under a licence to occupy office space at Manor Drive, Peterborough, PE4 7AP, England; and

(7) the Company was registered as an overseas company with a UK establishment with Companies House on 10 April 2017.

5. I accept that the PIK Lenders should be taken to be aware from the conduct of negotiations (and the other matters stated above) that the head-office functions of the Company are conducted from England. No Scheme Creditor has sought to suggest that the Company is managed from Luxembourg or that its COMI is in Luxembourg. In all the circumstance, I accept the submission that the Company's COMI is in this jurisdiction.
6. The Company is the borrower under a lending arrangement which I shall call the "PIK Loan Agreement". The scheme relates to and involves the restructuring of the PIK Loan Agreement as a first step in a sequence designed to address the Group's financial difficulties. The PIK Loan Agreement relates to the borrowing of US$400 million. The agreement itself was dated 1 May 2013. As at 30 April 2017, the amount of PIK Loans outstanding is approximately USD 699 million (plus approximately USD 37 million of accrued but uncapitalised interest). The PIK Loans mature on 1 May 2018, on which date an amount of approximately USD 868 million will become immediately due and payable.
7. The PIK Loans represent only part of the Group's borrowing. It also has structurally senior debt ranking in priority (termed "Existing Senior Indebtedness"): (a) some US$1,095 million of 8% senior secured notes and EUR 275 million 9% senior secured notes (together the "SSNs") issued by Algeco Scotsman Global Finance PLC (the "Issuer"), an affiliate of the Company, and due October 2018; (b) some US$745 million of 10.75% issued by the Issuer due October 2019 (the "SUNs"); and a revolving syndicated facility agreement between certain operating subsidiaries of ASH as the borrowers (the "ABL Facility"). As at 3 May 2017, approximately USD 870 million has been drawn under the ABL Facility (including letters of credit) and approximately USD 53 million remains available for drawing. The ABL Facility was originally due to mature in October 2017 but its maturity has recently been extended to July 2018 so as to give the Group an opportunity to achieve a restructuring of the sums due under the PIK Loan Agreement (albeit that an event of default will occur under the ABL Facility if the restructuring of the entirety of the sums due under the PIK Loan Agreement has not been achieved by October 2017).
8. The ABL Facility and the SSNs are secured, having the benefit of share and asset security granted by the Group's key operating subsidiaries. The SUNs are unsecured but have the benefit of guarantees granted by the Group's key operating companies.
9. ASH is a guarantor under the PIK Loan Agreement. The PIK Loans are secured by pledges over:

(a) the entire outstanding share capital of: -

i. the Company; and

ii. Algeco Scotsman Global S.à.r.l. ("ASG"), which is the sole shareholder of the Group's key operating companies (except for a 13.49% interest in the Group's North American holding company that is held by ASH); and

(b) certain receivables due to the Company under a loan made by the Company to ASH with the proceeds of the PIK Loans.

10. In broad summary, the purpose of the scheme is to effect a compromise arrangement in respect of the claims of the lenders under the PIK loan agreement by the cancelation of the PIK loans in exchange for a pro rata portion of first, an aggregate amount of cash consideration of US$95 million, subject to an adjustment in respect of an early tender fee to which I shall return and secondly, equity in the restructured group. It is, as I indicated earlier, the first step in a potential wider restructuring of the group's financial indebtedness and it is intended to facilitate the injection of new monies into the group.
11. The need for the reorganisation and the scheme to effect it arises out of difficulties of a financial nature affecting the group as a whole. Again, put very shortly and in terms which are elaborated in considerable detail in the explanatory statement relating to the scheme, the group has, since 2013, experienced declining revenues primarily attributable apparently to foreign currency movements and a decrease in revenue generated in Asia Pacific and the Americas.
12. The impact, both in terms of its balance sheet and its profitability, has been severe: certainly severe enough to prompt a review of its borrowing commitments. It is in that context that negotiations have been carried on between the company and its lenders and, in particular, the lenders under the PIK loan agreement with a view to a reorganisation, either consensually or if that was impossible to achieve, by resort to a scheme of arrangement.
13. Although the ABL Facility had the earliest maturity of all of the Group's secured indebtedness, the Group decided to approach the PIK Lenders regarding a potential restructuring of the PIK Loans first as:

(a) the Group considered that a restructuring of the PIK Loans would give it more flexibility in proposing and assessing potential transactions to address the upcoming maturities of its Existing Senior Indebtedness; and

(b) it was believed that a transaction with the PIK Lenders could be completed more quickly than a transaction with the creditors of the Existing Senior Indebtedness.

14. There is no real doubt on the evidence as to the fact and acuteness of the need for a reorganisation. This is reinforced by an independent report by Deloitte investigating alternatives to the reconstruction proposed.
15. Again in summary, the alternatives and thus the comparators, are that if the scheme is not sanctioned, the effects or consequences will likely be: (a) there would be no Equity Commitment, being an investment by the group's beneficial owner with an aggregate value of USD 250m, and a very low prospect of finding new sources of liquidity or refinancing; (b) an event of default would be triggered under the ABL Facility on 10 October 2017, allowing the lenders under the ABL Facility to accelerate and enforce their security over the key operating companies in the Group; (c) the above default would cause cross-defaults in respect of the SSNs and the SUNs, allowing such noteholders to accelerate and take enforcement action over their security over key operating companies in the Group (in the case of the SSNs) and call upon guarantees in respect of key operating companies (in the case of the SSNs and the SUNs); and (d) a cross-default would also be triggered in respect of the PIK Loan. Without support from the rest of the Group, the Company would have no prospect of repaying the PIK Loan and would likely have to file for an insolvency process in England, where its COMI is located.
16. Absent waivers from its lenders, the ramifications for the Group and its operations would be significant, including (1) potential compulsory insolvency filings of the key operational companies, (2) a risk of uncertainty across the operating businesses leading to suppliers requiring faster payments and customers potentially moving to competitors and (3) a potential trigger of insolvency termination rights under key customer contracts. All of the above would make it extremely difficult for the Group to continue trading.
17. The Comparator Analysis accordingly considered two possible scenarios: (a) the possibility that all or parts of the business of the operating companies could be sold as part of a distressed sale outside a formal insolvency process, and (b) alternatively, that creditors could realise the assets of the Group through an insolvency process either by way of a sale of the business sale or a fragmented business and asset sale. In either scenario the estimated recovery was less than the total amount outstanding in respect of the Existing Senior Indebtedness (which, as stated above, ranks prior to the PIK Loans in repayment).
18. It thus seems clear that, absent the Scheme, the anticipated recovery for the PIK Lenders is nil. By comparison the consideration offered under the Scheme represents a real and valuable return to the Scheme Creditors.
19. As previously indicated, the proposals which are now crystallised in the Scheme proposed were worked up between the company and a selection or group of the lenders under the PIK loan agreement. An ad hoc group representing, apparently, approximately 72 per cent of the aggregate amount in value of the PIK loans was established with a view to achieving a consensual reconstruction of the company's obligations in respect of the, PIK loans. These negotiations culminated in the execution of a term sheet on 7 November 2016 between the companies and other members of the group and TDR, which I should have explained, is the ultimate beneficial owner of the group and which is a private equity firm based in London and the ad hoc group itself.
20. Put in very broad terms once again, it was originally proposed and hoped that this agreement between the various participants to a restructuring agreement for the purpose of implementing the restructuring of the PIK loans (which I shall call the "restructuring agreement" and which binds the ad hoc group to support the PIK restructuring) might be implemented through an exchange offer without the need for recourse to a scheme. A 'two-layered approach was adopted. The first proposal under the PIK restructuring was to seek to achieve consent for an exchange offer from 100 per cent to the PIK lenders; but if the 100 per cent could not be achieved, the fallback was to proceed by way of scheme of arrangements provided other hurdles, of 75 per cent were achieved.
21. The alternative of a scheme, however, necessitated various changes in order to open a gateway to the scheme jurisdiction under English law. The PIK Loan Agreement is governed by New York law with a jurisdiction clause stipulating the New York courts. In addition, as I have previously indicated and the subject company being a Luxembourg company, consideration was required as to whether the presumption of COMI there should be reviewed.
22. In those circumstances, what was proposed, and eventually accepted by the relevant 75 per cent or more, was first, the amendment of the governing law clause in the PIK Loan Agreement to change the governing law from New York law to English law; secondly, the amendment of the jurisdiction clause to submit the parties to the non-exclusive jurisdiction to the courts of England; and thirdly, a waiver of any restrictions under the PIK loan agreement so as to permit the company to take all steps necessary to confirm or establish sufficient connection with England including, if appropriate, to take steps to ensure that its COMI is in England. The relevant clauses for the governing law and jurisdiction respectively, were clauses 9.11 and 9.12 and have helpfully been set out in paragraphs 43 and 44 respectively of the skeleton argument.
23. I shall return to these jurisdictional issues later. I turn now to the Scheme as now put forward for sanction.
24. The essence of the Scheme is (1) a pro rata share of a cash distribution of USD 95m (as adjusted downward as result of the take-up of the early tender fee as described in paragraphs 46 and 47 below) (the "Cash Consideration"); and (2) a debt-for-equity swap in respect of the PIK Loans which are to be exchanged for equity-like interests in a new Luxembourg limited partnership ("AS LP") which is to be inserted as a new intermediate entity in the Group structure.
25. As to the Cash Consideration:

(a) an Early Consenter will receive the early tender fee of 2% of the outstanding principal amount of its PIK Loan plus their pro rata share of the Cash Consideration (reduced as above); and

(b) a PIK Lender that is not an Early Consenter will receive their pro rata share of the Cash Consideration (reduced as above) only.

26. The implementation of the Scheme will involve the following key steps:

(1)The Contribution: ASH will transfer to AS LP (the newly incorporated Luxembourg special limited partnership) all of the shares it holds in the Group's intermediate holding companies so that AS LP will become the new holding company for the Group and its operating companies.

(2)The PIK Exchange: in exchange for releasing its PIK Loans, each PIK Lender will be entitled to receive its pro rata portion of (1) the Cash Consideration; and (2) the new equity interests.

(a) The Equity Commitment: one or more affiliates of TDR will invest in aggregate USD 250 million into AS LP (or, if agreed by the majority of holders of the new equity interests, into another member of the Group) within 270 days of the Scheme Effective Date (defined below).

(b) The Waiver: a waiver by the PIK Lenders, effective on the Scheme Effective Date, of any default or event of default under the PIK Loan Agreement that would result from (i) any step taken by any member of the Group to implement the PIK restructuring; and (ii) any default, event of default, acceleration, or enforcement of any other instrument any member of the Group was party to that evidenced indebtedness that arose as a result of implementing the PIK restructuring.

(c) The Mutual Release: the Company, ASH, AS LP, TDR, certain affiliates of TDR, and the Scheme Creditors agree to, among other things, provide comprehensive releases to various parties in respect of any claims and/or causes of action relating to the PIK Loans and the PIK restructuring.

(d) The Equity Commitment will become effective when the PIK Exchange is completed pursuant to the Scheme. The Ad Hoc Group has the right to enforce the Equity Commitment on behalf of all of the PIK Lenders, pursuant to the equity commitment letter, referred to in the Scheme and described in the Explanatory Statement. The date on which the PIK Exchange is completed pursuant to the Scheme will be the "Scheme Effective Date".

27. I do not think that I need dwell further on the precise contents of the scheme, it not being the function of the court to approve it either semantically or in point of detail, given that the court's function at this stage is ultimately to determine any remaining issues of jurisdiction and the most important matter of overall fairness, having regard to any objections of which there are none in this case.
28. Next I turn to the process mandated by the Companies Act 2006 in respect of schemes of arrangement in this jurisdiction.
29. The architecture of the English scheme jurisdiction provides for a two-stage process. The first stage relates to matters of jurisdiction and class composition. The second stage relates most to discretion and approval of proposals sanctioned by the requisite majorities and whatever class meeting structure was approved.
30. In this case, the matter came on before Barling J on 18 May 2017 for him to consider, and if thought fit approve a convening order to convene a single scheme meeting to be held on 8 June 2017. Barling J also had before him arguments, as I indicated was appropriate at that stage, relating to the jurisdiction of the court, particularly as regards its cross-border elements which, in a sense, mark-out this scheme compared to ordinary domestic schemes more frequently before the court.
31. In the event, Barling J was persuaded that a single scheme meeting was, indeed, the appropriate way forward and he so directed by his convening order on that date, 18 May 2017. As I say, argument was also addressed to him as to the jurisdictional issues likely to rise, it being the approved practice of the court pursuant to the Court of Appeal decision in Re Hawk Insurance Company Ltd [2001] 2 BCLC 480 that it should deal not only with class issues, but with impediments which would invalidate or render otiose any further progress of the scheme, provided, of course, creditors were adequately advised and informed as to the fact that those matters would be ventilated and as to the evidence or factual material necessary to adjudicate them.
32. I understand that Barling J, having allowed the scheme to go forward and approved the single class meeting, also indicated that he would, in due course, provide a reserved judgment to explain his reasoning for those results. In the event, the matter has come on before that judgment has been delivered but I do wish to emphasise now, as I shall emphasise again, that nothing I say is intended to cut across his reasoning nor in the light of the result would I expect it to do so.
33. Pursuant to the convening order and on 8 June 2017, scheme creditors comprising the class which had been assembled representing 100 per cent by value and 100 per cent by number of those scheme creditors present and voting in the scheme meeting in person or by proxy, approved the scheme. They represented some 98.97 per cent by value and 97.56 per cent by number of all scheme creditors entitled to vote at the scheme meeting. Those are very hefty majorities.
34. Nevertheless, and even in the context of such strong majority creditor support, the Court must be satisfied that the scheme is a proper one which has been properly explained and voted on in the interests of the creditors and not some impermissible sectional interest. Whatever the voting figures, the Court needs to consider at the final stage of review whether the scheme is one which an intelligent and honest man, being a member of the class acting in respect of his interest but having regard to the interest of the class as a whole might reasonably approve.
35. The relevant statutory provision is, as I have mentioned, section 899 of the Companies Act, 2006. The approach of the court as explained in a classic passage in Re Telewest Communications No. 2 Limited [2005] 1 BCLC 772 by David Richards J is set out in paragraph 71 of the skeleton argument. The upshot of that is that the relevant questions for consideration now can be sub-divided as follows. First, whether there has been compliance with the statutory requirements; secondly, whether the class was fairly represented and the majority acted in a bona fide manner; and thirdly, whether the scheme is one that an intelligent, honest man acting in respect of his interest might reasonable approve.
36. Counsel have checked compliance with the statutory requirements: and I am satisfied in that regard. Suffice it to say that having considered with Mr Allison the relevant evidence, it is plain that the statutory requirements being the achievement of the statutory majorities in compliance with the terms of the convening order at classes properly constituted and convened, have been satisfied.
37. As to the majority votes, in the present case, as it seems to me, there is no reason to believe that the scheme creditors who approved the scheme did not act in the interest of their class and there is every reason to conclude that they did.
38. Although the court must always test the fairness of the process, in terms of commercial judgment it is very rare for the court, if ever, to question the overwhelming majority view of persons who could be expected to be the best judges of their commercial situation, provided it is satisfied that they have been provided with proper information by reference to which to vote.
39. Here, the question really is as to whether they had been properly informed and as to whether there is any 'blot' on the scheme such as to invalidate the process, or any consideration raised by objection or otherwise such as to lead the court to depart from the considered view of the regiment.
40. Again, having considered the evidence with the assistance of counsel, there is no sign of misinformation. Nor have I discerned any defect in or impediment to the scheme. The view expressed by the overwhelming majority appears readily understandable, particularly having regard to the careful assessment of the alternatives, or comparatives, prepared by the board and by Deloitte.
41. Accordingly, but for the cross-border considerations to which I have referred, it seems to me to be plain that the scheme is one which the court should sanction.
42. I must return to the issues of jurisdiction and discretion which arise in the context of a cross border matter. These are, in a sense, the elements which distinguish the scheme from ordinary schemes. I should like to acknowledge and emphasise at once that Barling J also considered these aspects at the earlier stage, I reiterate that what I said now is in no ways intended to qualify, gloss or contradict anything which may be said hereafter by Barling J in his anticipated reserved judgment which will, no doubt, be more comprehensively and felicitously expressed than this. However, as argument has, quite properly, also been put to me I think it appropriate to make some comments of my own to explain why it is that I do not consider there to be any jurisdictional impediment, nor discretional reason for refusing sanction to the scheme by virtue of its cross-border elements.
43. Dealing first with jurisdiction, the primary question is whether this Luxembourg company, the subject of the scheme, is a qualifying company so to be subject to section 895 of the Companies Act. The court has jurisdiction to sanction a scheme in relation to a company which is, "a company liable to be wound up under the Insolvency Act 1986". At first blush, one might be surprised that the English court's jurisdiction to wind up does extend to such a company, but it is clear and has been confirmed in the case of Drax Holdings Ltd [2004] 1 WLR 1049, a decision of Lawrence Collins J, as he then was, that the court can sanction a scheme of arrangement in relation to any such company, though it must additionally be satisfied that there is a sufficient connection with this jurisdiction to warrant the intervention of the English court in the way proposed.
44. There is no doubt in the case that the Company is a company liable to be wound up under the Insolvency Act 1986. The strict jurisdictional test is thus fulfilled. I shall return later to the issue of sufficient connection.
45. The next question is whether that jurisdiction is impeded or restricted by a series of provisions of European law and, in particular, the insolvency regulation of 29 May 2000 and the Brussels regulation recast of 2012. Put shortly, it is, I think, well-established in a number of cases prior to this, including re Seat Pagine Gialle S.p.A., that the jurisdiction of the English Courts in respect of such schemes is not affected, still less undermined by the insolvency regulation for the simple reason, put shortly, that the scheme process under the Companies Act 2006 is not an insolvency process. That is so notwithstanding the reference to the power of the court being limited to a company which may be wound up by the court: it is settled now that this does not thereby imply that the insolvency jurisdiction of the court is in any way invoked.
46. Next for consideration is whether there is any fetter or restriction under European law. The Brussels regulation recast and its predecessor have caused more debate. There is a conundrum as to whether the Brussels regulation recast applies and if it does, with what effect. The debate is evident from the cases to which I have referred, especially Re Rodenstock [2011] EWHC 1104 (Ch), and also re Primacon, Re Magyar and Global Garden Products (Italy) S.p.A.
47. Suffice it to say that the English court has adopted a pragmatic solution so far, a solution which I am relieved to say can be adopted also in this case. The court has developed the practice, which I shall again adopt, of considering whether jurisdiction would exist under chapter 2 on the assumption that the Brussels regulation recast applies. If such jurisdiction can be found, it is not necessary to test whether that assumption is correct. It would only be in a case where such jurisdiction could not be found under chapter 2, that it would become necessary to decide whether the Brussels regulation recast does apply to schemes of arrangement. Put shortly, I am satisfied in the present case that even on the assumption that the Brussels regulation recast does apply, the court would have jurisdiction under that regulation under Article 8 and/or Article 25. It seems to me that either is likely to be available. (I should perhaps add, by way of excuse for this very short summary, that I apprehend that this matter may well be a matter which is more elaborately treated in the decision of Barling J and I, therefore, prefer not, myself, to elaborate further but simply to express my agreement with the conclusion that the European legislation does not provide an impediment.)
48. I return to issues of discretion and, in particular, the issues of sufficient connection and then effectiveness.
49. As to sufficiency of connection, it seems to me that in this case the primary considerations are (a) whether the premise put forward that the Company's COMI is in this jurisdiction is correct and (b) whether the amendments to the governing law and jurisdiction, further facilitating recourse to the scheme jurisdiction, are effective under the relevant New York law. Either or both those grounds may provide a sufficient connection with this jurisdiction to enable me to invoke the power, confident that there is a sufficient connection to justify its exercise.
50. As to the Company's COMI, I have already alluded to the steps taken to fortify the presumption of its COMI being in England. That the COMI of a company, even if shifted prior to the presentation of the scheme and for the intended purpose of facilitating that scheme will also, of itself, create a sufficient connection with England, as is demonstrated by, for example, the decision in Re Magyar Telecon BV.
51. But in this case, and as discussed in the course of the presentation, the further basis for establishing a sufficient connection, is the change of governing law and jurisdiction; and I note that it is on that ground that Judge Peck, a retired and very well respected judge of the US Bankruptcy Court, has primarily, if not exclusively, based his ultimate conclusion that the courts of New York would give effect to a scheme if sanctioned by this court.
52. The effectiveness of an alteration to a New York instrument is primarily, and possibly entirely, a matter for New York law. It is Judge Peck's opinion that under that law the alterations are permissible pursuant to clauses enabling amendments or changes of a fairly wide selection. I see no reason not to accept that opinion, which has indeed been expressed in other cases also and (so far as I am aware) not questioned in the New York courts.
53. That leads into the next consideration: which is whether, as is likely to be crucial, the sufficiency of the connection and the English Order made on the basis of it, would be likely to be recognised in a relevant foreign court (the most likely being a US Court of a Luxembourg court).
54. As to the US, Judge Peck has confirmed that it would be his expectation, having regard to his own experience, that a US court would likewise accept as effective the amendments proposed to governing law and jurisdiction and on that basis would be likely to accept and give effect in the US to the order of this court (if and when granted) to sanction and implement the scheme.
55. The position in Luxembourg has also been the subject of expert opinion. The conclusion of the Luxembourg expert through the firm of (FischFayot) is also to reassure this court that the Luxembourg Court, likewise, would give effect to the scheme and would not be deterred either by the insolvency regulation or the recast judgment regulations.
56. Given that these changes of the governing law and jurisdiction clause[s] and of COMI have been arranged with the purpose of opening the gateway to the English Court's jurisdiction, I should say a word about forum shopping. Forum shopping has sometimes been used as a pejorative description of a resort to an inappropriate court for inappropriate purposes. The question is whether the resort to this court in this context can be so described. In my view, it should not be.
57. As it seems to me, the resort to the English Court in these circumstances is appropriate as well as understandable, given what I have been given to understand are the lack of any viable or efficient alternatives. The aim and object of the scheme is not sectional, nor for personal advantage. A scheme has been propounded and the jurisdiction has been invoked because the general body of creditors requires the reconstruction for the protection of their interest and for the future business of the company and the group. The English scheme jurisdiction offers a salutary and fair solution. In those circumstances, I take the view that it is an example, if one has to use the phrase, of "good forum shopping".
58. I reiterate what I said in Apcoa Parking Holdings GmbH [2014] EWHC 3849 (Ch) where I also accepted that a change in jurisdiction clause for the purpose of opening the gateway to the English scheme jurisdiction was appropriate but that wherever there is such a change with such an intended purpose, the court will be careful to scrutinise whether the change of law or jurisdiction or the resort more generally to the English court is inappropriate. I gave examples of the sort of context which might be inappropriate in paragraph 251 of my decision in Re Apcoa. I mention it only to emphasise that sanction is not automatic, nor will resort to the scheme jurisdiction invariably be approved, even if other jurisdictional requirements are satisfied: the court will be scrupulous to ensure that resort to its jurisdiction is not inappropriate, or intended to oppress. But I see no signs of any of those in this case and I therefore do not consider that forum shopping is an objection to what is proposed.
59. Lastly, and the only other matter which I think I should have mentioned is a feature of the proposals which, though not unusual, it is right that I should be seen to have addressed. This is the provision for an early tender fee.
60. Again, put shortly, the exchange offer which was part 1 of the phased proposals provided that a PIK lender who by a certain date consented to the exchange offer would receive what was called an early tender fee of a cash amount equal to 2 per cent of the principal amount of a scheme creditors, PIK loans. Those lenders who did not take up that opportunity would not receive that cash amount.
61. The reason for addressing this expressly is that such arrangements do invite scrutiny, lest they affect either the issue as to class constitution and composition (on the basis that the offer may mean that those who accept are unable to discuss fairly proposals which others have rejected) or because it may be relevant to the general question of fairness.
62. As it seems to me, the most important feature to check is whether the arrangement, in this case the early tender fee, was only offered to a chosen few or was offered generally leaving it to those offerees to determine for themselves, being given an adequate opportunity, whether or not to accept it. A further consideration is whether the level of the fee is such as to take it beyond the norm and raise the question as to whether it would purchase consent where otherwise it might be refused.
63. On both grounds, I am persuaded that in this case the early tender fee is acceptable. It was open to all and it is in no way at a level in excess of what has become normal. The only thing I would caution is to make clear that by using the term "normal", I do not mean automatically acceptable, simply that it is not out of the realm of experience.
64. In the round therefore, and with thanks to counsel for their presentation both written and oral and for the very careful work of those involved in preparing what is, in fact, quite a complex set of arrangements, I propose to sanction the scheme and to make an order which Mr Allison assures me is and appears to me to be in a short but standard form. As I say, I will invite, once I have had an opportunity to consider this draft judgment, further assistance from counsel, both to insert the reference parts and in case there are matters which they either wish to be further explained or which I have inadvertently omitted.

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