Re Titan Petrochemicals Ltd

• Jurisdiction: Bermuda
• Judgment Date: 18 October 2013
• Date: 18 October 2013
• Docket Number: Commercial Jurisdiction 2012 No 243
• Court: Supreme Court (Bermuda)

[2013] Bda LR 76

In The Supreme Court of Bermuda

Commercial Jurisdiction 2012 No 243

In the matter of the Companies Act 1981

Re Titan Petrochemicals Limited

Mr C Hill and Mr N Miles for the Petitioner

Mr M Diel and Mr K Taylor for the Company

The following case was referred to in the judgment:

Re Demaglass Holdings LtdUNK [2001] 2 BCLC 633

Winding up — Appointment of provisional liquidators — Restructuring — Adjournment

EX TEMPORE RULING of Kawaley CJ

Background

1. Before dealing with the substance of the applications before the Court for a winding-up order, alternatively for the appointment of provisional liquidators to displace the management and, in the further alternative, for the appointment of joint provisional liquidators with “soft” powers, which are opposed by the Company, it is helpful to remember in broad outline the history of the present proceedings.

2. On or about July 9, 2012, Saturn Petrochemical Holdings Ltd., a purported redemption creditor, petitioned to wind-up the Company. On August 13, 2012, the Petition was first heard and thereafter it was adjourned, more or consensually, on several occasions to enable the Company to pursue attempts at a restructuring.

3. On April 29, 2013, the Company filed an application to strike-out the Saturn Petition and on May 10, 2013 the Court ruled that the Petition was liable to be struck-out. The strike-out Order was not made on that date. The matter was adjourned to allow KTL Camden, the present Petitioner, to apply for substitution. And that substitution application was, in the event, granted on July 23, 2013.1

4. Thereafter the present Petitioner sought the appointment of provisional liquidators and, alternatively, an interim injunction preserving the Company's assets while further and renewed restructuring efforts were pursued. An interim injunction was first granted on August 23 this year. On August 16, 2013 the Petition was adjourned until September 26, 2013 and on September 26, 2013 the Petition was further adjourned to today's date.

5. At a hearing on August 30, 2013, in Chambers I believe, I encouraged the Company to work with the Petitioner to see whether an informal committee of creditors could be established to monitor the restructuring efforts with a view to avoiding the need to appoint provisional liquidators. My reluctance to appoint joint provisional liquidators, even with “soft” powers, was based in part on the fact that the Petitioner appeared to be the only creditor with positive concerns about management's ability to manage the process. My reluctance was also prompted by concerns to avoid the burden of any unnecessary provisional liquidation costs for a company which appeared, possibly, to be capable of managing the restructuring process without any formal supervision from this Court.

The current state of the proceedings

6. The Petition was heard today and the broad picture which presented itself was that the restructuring process had not progressed at the rate which had originally been hoped. In addition, for reasons that are ultimately in my judgment not decisive, the

composition of the informal committee which the Company very properly attempted to put together ended up being not representative of the general body of unsecured creditors at all. It was conceded that all committee members who had agreed to serve were in fact note-holders who were...