Update – Announcement of proposed scheme of arrangement, pursuant to Part 26 of the Companies Act 2006, for a full and final settlement in respect of surplus entitlements and the payment of statutory interest – amendment to proposed scheme – 31 May 2018

Further to the announcement made on 14 May 2018, a copy of which can be accessed here, the Joint Administrators have been working to address concerns raised by certain Higher Rate Creditors at the convening hearing (held on 9 and 10 May 2018), in relation to the terms of the proposed scheme. 

Following discussions with the Subordinated Creditor, the Joint Administrators are pleased to confirm their decision to make a small number of important amendments to the terms of the proposed scheme in order to improve the proposed scheme’s structure and functionality. The changes to the proposed scheme:

• amend Part IV (Scheme Distributions to Certifying Creditors), so that Clause 12.2 of the proposed scheme, which sets out the provisions relating to LBIE’s obligation to consult with the Subordinated Creditor as regards the terms of a counteroffer read as follows:
  
  “Without prejudice to the generality of Clause 12.1, in the event that the Company determines to make a Counteroffer pursuant to Clause 11.2.3, it shall consult with the Subordinated Creditor regarding the terms of such Counteroffer; however, the final decision regarding the terms of any Counteroffer shall be made by the Company in its sole discretion and having regard to the Relevant Principles”;

• clarify that the Subordinated Creditor may only use confidential information it receives in relation to certifications for the purposes of the Scheme, and must destroy (or return to the Company) such information once it is no longer reasonably required for the purposes of the Scheme; and
• clarify that any person appointed to act as an Adjudicator must be a former member of the England & Wales judiciary and/or an English law qualified Queen’s Counsel.

The amendments to the terms of the proposed scheme can be accessed here, and the version of the scheme on which Scheme Creditors (or their appointed proxies) will vote at the Scheme Meetings can be accessed here. 

The Joint Administrators have also updated the Explanatory Statement to reflect the amendments to the proposed scheme. The changes to the Explanatory Statement circulated to creditors on 14 May 2018 can be accessed here, and the full updated Explanatory Statement can be accessed here.

The Joint Administrators are aware that a small number of creditors have raised questions in respect of the role of the Subordinated Creditor in determining the amount of a counteroffer and consider that the changes to the terms of the proposed scheme address such questions. 

The Subordinated Creditor has confirmed that notwithstanding these amendments to the proposed scheme, it will continue to support the scheme and will be voting in favour of it at the Scheme Meeting at which it is entitled to vote.

Higher Rate Creditors who have already elected for the Settlement Payment Option and would like to change their election as a result of this amendment to the Scheme can do so by contacting the Joint Administrators using the following email address schemequeries@lbia-eu.com. 

Creditors who have already voted in respect of the proposed scheme do not need to take any further action for their vote to be counted, unless they wish to change their vote as a result of the changes to the terms of the proposed scheme. Creditors who wish to change their vote should contact the Joint Administrators using the following email address schemequeries@lbia-eu.com.

Creditors are requested to notify the Joint Administrators of an intention to change their vote and/or election in respect of the proposed scheme as soon as possible. In any event, the Joint Administrators must be notified of such a change prior to the deadlines for voting and elections described in paragraphs 2.3 and 2.4 of Part III of the Explanatory Statement and in accordance with the procedures for voting and making elections described in paragraphs 4 and 5 of Part III of the Explanatory Statement, respectively.   

If you have any questions in relation to the proposed scheme, please contact the Joint Administrators by email to schemequeries@lbia-eu.com.