UK:
Fairhold Securitisation – Can Noteholders Claim Advisers' Fees Through the Trustee?
31 March 2017
Reed Smith (Worldwide)
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This week saw the High Court clash between the swap provider,
UBS, and the recently appointed replacement note trustee (Glas
Trust Corporation) on the embattled Fairhold Securitisation.
The dispute at hand centres on whether or not the ad hoc
noteholders group's fees and expenses (comprising the fees of
its financial adviser and lawyers) can be recovered from the
waterfall, effectively subordinating payments to the swap providers
and noteholders. The financial adviser's fees were
reported to be in excess of £3.75m.
Followers of the Fairhold
Securitisation saga will be aware of the wider dispute between
noteholders and the swap providers, in which noteholders directed
the note issuer to rescind the transaction's swaps, on the
basis that the note issuer was induced to enter into the swaps as a
result of an alleged fraudulent misrepresentation made by swap
providers.
Whilst the two day hearing on the
advisory fees dispute has now concluded, judgement has been
reserved, so a further update will be posted on this blog once
judgement has been handed down. The outcome will be
particularly relevant for corporate trustees, investors, financial
advisers and lawyers advising in the context of capital markets
restructurings and disputes.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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