Re Contel Corporation
| Jurisdiction | Bermuda |
| Judgment Date | 07 March 2011 |
| Date | 07 March 2011 |
| Docket Number | Commercial Jurisdiction 2011 No. 67 |
| Court | Supreme Court (Bermuda) |
In The Supreme Court of Bermuda
Commercial Jurisdiction 2011 No. 67
In the Matter of Contel Corporation Limited
Mr C Luthi for the Company
The following case was referred to in the judgment:
Cambridge Gas Transport Corporation v The Official Committee of Unsecured Creditors of Navigator Holdings PlcELR [2007] 1 AC 508
Application for recognition of a scheme of arrangement approved by foreign court - Debt for equity swap
EX TEMPORE RULING of Kawaley, J
Introductory
1. In this case the Company applies for recognition of a scheme of arrangement entered into between the Company and its creditors in Singapore. The Company, although incorporated in Bermuda, has its shares listed on the Singapore Stock Exchange and carries out a substantial part of its manufacturing business in the Peoples Republic of China.
2. This appears to be the first occasion on which this Court has been asked to recognise a scheme of arrangement approved by a foreign court in respect of a local company in circumstances in which a parallel scheme has not been implemented in Bermuda. The background to this case is as follows.
Singapore law position
3. As far as the Singapore law position is concerned, I am satisfied based on the Affidavit of Roland Tong Beng Teck that the Singapore law provisions relating to schemes of arrangement are substantially similar to those under Bermuda law. It is true that Singapore law provides for an automatic stay of proceedings once an application in relation to a scheme is filed, but in my judgment that has no impact on the broad similarities of the substantive regimes.
4. The Scheme in the present case was approved by over 88% of the creditors present and voting. Although one significant creditor voted against, the Scheme was approved by the requisite statutory majorities which, significantly, are the same under Singaporean and Bermudian law. In fact, although this has not yet been documented in formal evidence1, the creditors who attended and voted represented 91.8% of the total Company debt. That is an extraordinarily high level of creditor participation in the present Scheme.
5. It also appears from the evidence that a parallel scheme was not implemented in part because of haste and in part because of other logistical considerations. There appears to be no deliberate attempt to avoid any consequences of Bermuda law which might be more favourable to the creditors concerned.
Applicable legal principles
6. The law in relation to...
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