Fairhold ad hoc holders deny ‘enforcement’ of Clifden’s admin hire

By Susanna Moon

Chicago, July 20 – Fairhold Securitisation Ltd.’s ad hoc group notified holders that it was “not involved with purported enforcement” under the £413.7 million of class A secured floating-rate notes due 2017 and £29.8 million of class B secured floating-rate notes due 2017.

Clifden IOM No.1 Ltd. reportedly appointed Michael Bowell and Dermot Coakley as joint administrators to the issuer under the two series of mortgage-backed floaters, according to a previous notice by Fairhold on July 16.

The administrative appointment “is void and of no legal effect,” Fairhold had said on Monday and repeated on Thursday.

“The statements in the announcement are inaccurate and should be ignored,” Fairhold said in a notice Thursday.

On Friday, the ad hoc group notified holders that after the meetings on June 11, the minimum percentage of holders entitled to give a direction in writing to the note trustee to enforce by way of appointment of administrators was increased to 50.1%.

The ad hoc group said it “confirm[s] that they have not given any enforcement direction to note trustee.”

The release stated that 50.1% of the noteholders is required to direct the trustee for enforcement; that the group holds more than 50.1% of each class of notes; that none of the holders of the group directed the trustee “to enforce in any way whatsoever”; and therefore, the trustee cannot have been directed by the required percentage of noteholders to enforce.

As noted on April 30, the ad hoc group holds about 60% of the class A notes, more than 75% of the class B notes and 100% of the tranche C notes and I3 note HAS.

Therefore, the ad hoc group controls the class A notes, the class B notes, the tranche C notes and the I3 note HAS, the release said on Friday.

For questions, contact glen.cronin@rothschild.com or +44 20 7280 5506, simon.lalande@rothschild.com or +44 20 7280 1589, richard.tett@freshfields.com or +44 0 20 7832 7627, christopher.barratt@freshfields.com or +44 20 7832 7101.

More details

Meanwhile, on Thursday a notice was sent to holders by Fairhold “in administration” that John Hedger and Michael Bowell and Dermot Coakley have been appointed as joint administrators and that the “administrators have now assumed control of the issuer’s assets and will work during the administration period to maximize the outcome for all creditors of the issuer.”

Afterward, the issuer entered into a sale and purchase agreement with Fairhold Investments Ltd. to sell some receivables including the funding loans and the swaps for £402 million in cash, subject to the issuer’s right to repurchase the receivables and sell them to a third party if it receives a higher offer, according to the notice by the “in administration” issuer.

The sale agreement states that if at any time during the next six calendar months the issuer receives an offer from a third party to purchase the receivables for a purchase price of more than £402 million, the issuer will repurchase the receivables from FCIL and sell them to the party for the higher offer.

The release continued, “One of the immediate tasks of the administrators will be to undertake an investigation into the prior affairs of the issuer. This will include investigating serious allegations of material misappropriation of funds payable to the issuer under the terms of the transaction documents and impropriety in relation to the assets and rights of the issuer.”

Fairhold said on the appointment was made by a director of Clifden in the “capacity as a noteholder and agent of the note trustee.”

The company cited the following reasons for the invalid appointment in the release:

• No class A note enforcement notice or class B note enforcement notice has been given by the note trustee;

• The note trustee has not appointed Clifden as its agent nor authorized it to act as its agent;

• The note trustee had no prior knowledge of nor has it in consented to the purported appointment;

• The purported administrators have confirmed that they have not consented to act as administrators of the issuer; they do not consider themselves to have been validly appointed as administrators of the issuer; and no documentation, correspondence or other communications purporting to be from the purported administrators should be relied upon in any way in relation to the issuer; and

• Despite having been requested to do so, Clifden has not provided any evidence of its status as a class A noteholder.

The issuer said that it is reserving its rights and the trustee's rights “in relation to all matters relating to the purported appointment are reserved in all respects. The issuer intends to take immediate action to rectify any improper filings or registrations that may have been made as a consequence of the purported appointment and/or to seek other remedies.”

As announced Feb. 20, Clifden was tendering for £413.7 million of class A secured floating-rate notes due 2017 and £29.8 million of class B secured floating-rate notes due 2017 issued by Fairhold Securitisation Ltd. in order “to establish a holding” for each series of notes.

On June 4 the company said that it failed to obtain the needed tenders to establish its required holding of £104 million of the class A secured floating-rate notes due 2017.

Clifden then said it was “actively exploring certain options with a view to enabling it to reach the required holding, including acquiring notes in the secondary market on a delivery against payment basis brokered through one of the offeror’s clearing banks.”

Fairhold Securitisation is incorporated in the Cayman Islands.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.