Judgment Hand Down: Standard Profil Automotive GmbH

Following the earlier decision of Richard Smith J to convene a single meeting of noteholders, today Meade J sanctioned the new money scheme of arrangement proposed by Standard Profil Automotive GmbH.

The case is of wider interest for two reasons.  First, Meade J affirmed and applied his earlier decision in ED&F (2020) to approve the elevation terms that incentivised participation in the new money.  He held that the closer scrutiny of elevation mechanics in the context of a Part 26A plan (Petrofac, building on observations in Adler) was not warranted in a scheme of arrangement, especially one with overwhelming support including from outside the ad hoc committee who had originally agreed the terms with the scheme company.  Second, Meade J was satisfied, applying the likely / reasonable likelihood / realistic prospect tests (all stated without differentiation in DTEK), that the scheme would be accorded recognition in Germany.  He so held notwithstanding the recent preliminary judgment of the Frankfurt Court in Aggregate declining to recognise a Part 26A plan because in the case before him the scheme company had changed the governing law of the documents to English law and had selected an English court exclusive forum.  Amongst other grounds, this allowed for recognition in Germany pursuant to article 8 of the Hague Convention 2005 on Choice of Court Agreements (HCC).  Accordingly, even if the preliminary decision of the Frankfurt Court in Aggregate were to be upheld, there was (at least) a realistic route to recognition in Germany.

Adam Al-Attar KC and Charlotte Cooke appeared for Standard Profil Automotive GmbH instructed by Linklaters LLP.

Read the full judgment here.