Deloitte wins key SIV appeal victory
Deloitte has overturned a key decision at the High Court which would have forced the receivers to pay back some creditors of the collapsed Whistlejacket SIV on a first come first served basis
The decision has now established a set framework for how to treat creditors
of the three other SIV receiverships it currently has on its books.
Neville Kahn, one of the joint receivers appointed by
Deloitte,
said: ‘We are delighted with the judgment. We are in the process of
restructuring Whistlejacket and what was needed was clarification as to how to
treat certain matters. This judgment has been closely monitored by other SIV’s
who will also now be able to crack on with their restructurings.’
The original ruling had meant that receivers from Deloitte would have had to
pay back a major creditor when its note came up for repayment, but a High Court
judge reversed the decision on appeal this week.
Senior Whistlejacket creditors with similar levels of exposure will now be
paid at the same time. There had been concerns that the pay as you go system
would have seen Deloitte forced to concentrate on paying back creditors at the
front of the line at the expense of those further down the food chain.
‘It’s quite an important ruling because it actually steers back the precedent
towards the commercial aspects of normal insolvency practices,’ said business
recovery director Phil Bowers.
‘It provides the receivers with a broad discretion as to timings and payments
of dividends. It also gives the investors some flexibility.’
The Whistejacket creditors named in the original case have until 2 June to
lodge an appeal at the House of Lords, Bowers added.