Membership Benefits- Market representation;
- A unified voice on key issues;
- Cutting edge market intelligence;
- News, views and data;
- Sector specific training.
|
|
Scottish Lion Appeal Decision |
|
|
|
|
Breaking news: 1: Here is a link to the decision on Scottish Lion, issued at 13h00 on Friday 29 January 2010. http://www.scotcourts.gov.uk/opinions/2010CSIH6.html 2: The appeal was allowed. 3: The Scheme proponents will now have another chance to persuade the Scottish Court on the basis of all the facts and arguments that the Scheme is fair and that the votes were properly valued. 4: Costs remain in debate. Basis of ruling: The Lord Ordinary was incorrect in treating the issue as one of principle; each scheme needs to be evaluated on its own merits. The first instance judge is not permitted to administer a preliminary "knock-out" blow to a scheme purely because there are dissentient long-tail policyholders. Reasoning: Two paragraphs from the judgment encapsulate the reasoning: [46] ...for reasons which are readily understandable, [the dissentient policyholders] would prefer to retain their existing contractual rights. But the loss of these contractual rights cannot be said a priori to be something which would disable the court sanctioning the scheme. It is of the very nature of the power conferred on the court under section 899 that, provided the statutory majorities are properly obtained and the requisite test for the granting of sanction satisfied, contractual rights will, notwithstanding opposition by persons in right to them, be varied or extinguished. We can see no basis in the authorities for the view that "creditor democracy" operates only where "failure to agree would ruin it for all". On the other hand, its operation is not conclusive... [48] ...The argument that the proposal in this scheme is unreasonable, or is not "so far fair and reasonable as that an intelligent and honest man, who is a member of that class, and acting alone in respect of his interest as such a member, might approve of it" ..., is one which should be addressed when the whole relevant factual circumstances are before the court and it is, in light of these, considering the exercise of its discretion. At that stage the argument based on the fact that insured with long tail policies are being required to accept current estimated values in lieu of their contingent claims may, possibly with other arguments, win the day. But that circumstance is not, in our view, at this stage so overwhelming a factor against the granting of sanction that the petitioner can be denied the opportunity of establishing, if it can, the positive benefits of the scheme, as well as the soundness and robustness of the procedures it has put in place for valuing claims.
|
|
