Vol 12 (2015) - Issue 3

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Apcoa Parking Holdings GmbH & Ors [2014] EWHC 3849 (Ch)

Introduction
An important decision on a cross border restructuring, Apcoa Parking Holdings GmbH & Ors [2014] EWHC 3849 (Ch) is notable for there being opposition to proposed schemes of arrangement at both the convening and sanction hearings. In the face of such opposition, the Court had to look in some detail at certain aspects of the proposed schemes, exploring some of the boundaries of the court’s jurisdiction to sanction schemes of arrangement in the process.
The Apcoa group is a leading car park operator, with operations across Europe and this was not the first time the group had utilised schemes of arrangement. Earlier in 2014, in Apcoa Parking Holdings GmbH & Ors [2014] EWCH 997 (Ch), the court sanctioned schemes of arrangement in respect of nine Apcoa group companies, with schemes of arrangement being used on that occasion to extend the maturity of senior facilities, without the need to obtain the unanimous consent of lenders. Seven of the nine companies were not incorporated in England and did not have their centre of main interests in the jurisdiction. That being the case, the first Apcoa judgment is in itself interesting in that, in order to establish a sufficient connection with England to found the court’s jurisdiction to sanction a scheme, governing law and jurisdiction clauses were amended to refer to English law and the English courts. The court accepted this constituted a sufficient connection, though, on that occasion, the schemes were not opposed.
The original schemes of arrangement having been sanctioned, the Apcoa group companies endeavoured to agree a debt restructuring with its lenders. As it proved impossible to obtain the consent of all lenders, however, the group again sought to put schemes of arrangement in place.

Opposing and supporting parties
As noted above, the schemes were opposed throughout by certain creditors of the group companies, principally FMS WertmanagmentAnstalt öffentlichen Rechts ('FMS'), operating under the supervision and control of an agency of the German Government. Centerbridge Partners ('Centerbridge'), the largest creditor of the Apcoa group, also appeared at both stages of the court process in support of the schemes.
Hildyard J notes (at [22]) that FMS depicted Centerbridge throughout the proceedings as a 'loan to own vulture' who in fact were masterminding the process of the schemes in pursuit of its own commercial objectives. He likewise observed that Centerbridge sought to portray FMS as a 'hold-out creditor', relying on FMS’ own website descriptions of itself as an expert on accelerating the unwinding of portfolios, particularly where a borrower is under pressure.
In his judgment, Hildyard J states (at [25]) that neither contestant probably had an interest in the long-term investment in the Apcoa group and that it is instructive to note that class issues needed to be objectively tested by reference to legal rights and legitimate interests. We consider the key aspects of Hildyard J’s decision in the case below.

The court’s role
Hildyard J’s judgment covers his decisions at both the convening and sanction hearings.
At the convening hearing Hildyard J explained (at [42]):
'The principal jurisdiction question at the Convening Hearing is normally the identification of the appropriate classes for the purpose of convening meetings to vote upon the scheme proposals; but other matters going to the jurisdiction of the court may also be raised, and it is obviously optimal that any such matters be adjudicated, if possible, since if the court lacks jurisdiction there is no point in any class meetings at all.'