Category Archives: Secured Lenders

Investing in the right infrastructure

The governments continued focus on investing in Indias infrastructure is welcome. However, this focus has almost entirely ignored one critical area where the infrastructure is so decrepit that its condition is severely restricting the countrys economic growththat which is needed to ensure the rule of law.

One key part of the rule of law infrastructure concerns courts and judges. Recent reports state that India currently has just 16,400 court halls and even fewer judges. Over 36% of high court judges posts and more than 4,500 posts of subordinate judges lie vacant. Most see these shortages as contributing to the backlog of cases in the judiciary. That is but the tip of the iceberg.

The countrys inadequate rule of law infrastructure isnt only affecting the millions of cases languishing in its courts. It has far-reaching effects every dayon the hundreds of millions of cases that dont even get to court, and the billions of transactions where there arent even any disputes.

To witness these effects on matters outside the court system, one need only review the state of private sector lending in the country today. Almost all private sector lending (other than credit card debt) is secured. Lenders insist on collateral because of the cost, delay and uncertainty associated with enforcing creditor rights. Borrowers have no choice but to provide the collateral, as alternative sources of funding are unavailable. Such secured lending is not an economically desirable outcome, as it comes with high hidden economic costs.

First, with secured lending, the loan decision is no longer driven by the potential economic benefit expected from the activity for which the loan is sought. The lending decision is more closely linked to the value of the collateral provided to secure the loan. Second, loan defaults and non-performance dont just impact the activity for which the loan was takenthey adversely impact otherwise healthy assets that have been provided as collateral.

And theres more: encumbering capital assets creates artificial scarcity in those assets and prevents the use of those assets for additional (potential revenue-generating) economic transactions; secured lending makes the encumbered capital assets vulnerable to value erosion from unrelated transactions; and it hinders effective signalling by markets in relation to the price and value of encumbered capital assets, and thereby impedes effective allocation of capital.

Take the example of a borrower, B, who borrows Rs.1,000 crore and pledges the publicly traded shares of another listed company, C, as collateral to secure this loan. The pledged shares cannot be traded until the loan is repaid. Therefore, until the loan is repaid, the supply of company Cs shares is artificially lowered. Economic transactions involving the pledged shares are also frozen for this period. The pledged shares are also more vulnerable to value erosion during this time. If company C were to make a poor business decision, then while the pledge is valid, B would not be able to sell those shares in response to Cs poor business decision. In fact, borrower B effectively would have no option other than to sit by and watch its asset value erode. This also shows that B has no way of managing or limiting the adverse effects of a poor economic decision by C, while the shares are pledged.

While the above principles apply most acutely when the collateral is in the nature of assets like shares, the principles would also hold to a varying degree if other capital assets, such as real property, were pledged as collateral. To then gauge the scale of economic harm the poor rule of law infrastructure is wreaking on the countrys economy every day, one need only extrapolate the above example and apply it to the total outstanding bank credit that is secured by capital assets in India today.

This lack of adequate infrastructure is not only affecting credit-related transaction costsbecause enforcement of creditor rights is impactedit is also affecting equity-based investments where the enforcement of shareholder rights face similar challenges.

In the areas of venture capital and private equity funding, investors are now requiring promoters to deposit their shareholding in escrowso that in the event of having to enforce shareholder rights, a private third party (that is, the escrow agent) can provide relief and the investor doesnt have to face the uncertainty, cost and delay associated with court-based remedies. These arrangements also carry similar hidden economic costs, and the escrow fees increase overall transaction costs.

Other aspects of the economy are also being affected by the countrys poor rule of law infrastructure. Court delays are seen as an opportunity to game the system. For instance, unscrupulous high-value borrowers identified as wilful defaulters by banks are using court delays as a device to buy time and delay or defray the impact of their defaults. The resulting costs are being picked up by the banking system, because of their impact on capital adequacy and overall risk within the banking system. In other instances, parties sign contracts with little or no intention of performing their obligations. They do so comfortable in the knowledge that the cost and time that would be taken by counter-parties to obtain redress from the courts makes the likelihood of any court-based recourse extremely remote. These unhealthy practices are in turn forcing counterparties to look at alternative methods of securing their contractual rights in ways that dont rely on court-based redress. The alternatives used inevitably increase transaction costs and carry hidden economic costs.

Investing in rule of law infrastructure would reduce transaction costs in India, and thereby increase transaction volumes and associated revenues to the government, benefiting economic growth and productivity. More importantly, ensuring that the rule of law is well supported with sufficient infrastructure also assures the people of India that their fundamental rights are secure and well protected.

Ramanand Mundkur is a Bengaluru-based lawyer.

Comments are welcome at

Cratered Stocks:Vapor (VPCO), Ultrapetrol (Bahamas) (ULTR), Lilis Energy Inc …

The Samp;P 500 ended almost 1 percent lower on the day, with energy the only sector clinging to slight gains as oil settled higher, but remaining near multi-year lows. The Samp;P 500 index shed 12 points, or 0.6 percent, to 2,050.

Of the 10 largest companies in Silicon Valley, Los Gatos-based Netflix enjoyed the strongest year by far with a gain of 134.4 percent for 2015.

2015 is shaping up to be the worst year for the market since 2011. It was the Dow’s first annual loss since the crash year of 2008.

At the closing bell on Thursday, the Dow Jones industrial average was down 178 points-or 1%-at 17,425.

The Samp;P 500 fell nine points, or 0.4 percent, to 2,054.

The Nasdaq composite shed 58.43 points, or 1.2 per cent, to 5,007.41.

Among the winners were consumer discretionary stocks, including retailers, hotel companies and auto manufacturers, which climbed 8 percent for the year.

Consumer stocks also took the top three spots on the Dow, led by Nike’s 30-percent increase in 2015. Oil prices had witnessed some big swings recently as they were traded near multi-year lows.

“The bottom line is demand for technology remains very high”, said Tim Bajarin, principal analyst with Campbell-based Creative Strategies, which tracks the tech sector.

Low oil prices will continue to present a mixed bag for the USA economy.

The Samp;P 500 was down 0.3% for the year and the Dow Jones industrial average was down 1.8%.

Six of the 10 major Samp;P sectors were lower, led by the 1.07 percent fall in the utilities sector.

Ultrapetrol (Bahamas) Limited (NASDAQ:ULTR) fell -44.77% or 0.105 points on Thursday and made its way into the losers of the day. After trading began at $0.20 the stock was seen hitting $0.20 as a peak level and $0.10 as the lowest level. The stock ended down at $0.105. The daily volume was measured at 2.21 million shares. The company has a market cap of $14.78 million. The mean estimate for the short term price target for ULTR stands at $4.00 according to 1 Analysts. The higher price target estimate for the stock has been calculated at $4.00 while the lower price target estimate is at $4.00. On Jan 2, 2015, the shares registered one year high at $2.20 and the one year low was seen on Dec 31, 2015. The 50-Day Moving Average price is $0.33 and the 200 Day Moving Average price is recorded at $0.61. Ultrapetrol (Bahamas) Limited (NASDAQ:ULTR) on December 15, 2015 announced that the Company has decided not to make at this time the $10 million interest payment due December 15, 2015 on its outstanding 8.875% First Preferred Ship Mortgage Notes due 2021 (the “Notes”) and the $6.5 million interest and principal payments on other loan facilities related to the Company’s River Business. The Company has reserved any decision regarding whether or not to make the payments during the Cure Periods of the Notes and the other loan facilities related to the River Business. Although the Company currently has sufficient liquidity to make the payments, the Company believes it is prudent not to do so at this time as negotiations continue with representatives of holders of the Notes and with the Company’s other secured lenders.

As previously disclosed, the Company is in ongoing negotiations with lenders to the Company’s UP Offshore subsidiary regarding the refinancing of outstanding loan facilities, with the goal of extending near-term maturities and amortization schedules. Additionally, the Company has initiated discussions with certain creditors of its River Business to consensually restructure selected debt securities. The Company believes that it has sufficient liquidity to fully fund all aspects of its operations on a normal basis throughout these negotiations.

Has ULTR Found The Bottom and Ready To Move Up? Find Out Here

Vapor Corp. (NASDAQ:VPCO) witnessed a decline in the market cap on Thursday as its shares dropped -23.94% or -0.170 points. After the session commenced at $0.71, the stock reached the higher end at $0.71 while it hit a low of $0.54. With the volume soaring to 1.21 million shares, the last trade was called at $0.540. The company has a 52-week high of $7.80. The company has a market cap of $5.56 million and there are 10.30 million shares in outstanding. The 52-week low of the share price is $0.13. VPCO has rose 4.75% during the last 3-month period. Year-to-Date the stock performance stands at -23.94%. The stock price is expected to reach $6.00 in the short term. The number of analysts agreeing with this consensus is 1. The higher estimate for the short term price target is at $6.00 while the lower estimate is at $6.00. On Jan 5, 2015, the shares registered one year high at $7.80 and the one year low was seen on Dec 21, 2015. The 50-Day Moving Average price is $0.31 and the 200 Day Moving Average price is recorded at $0.73. Vapor Corp. (NASDAQ:VPCO) on December 29, 2015 announced a change to the record date for its upcoming special stockholders meeting.  The record date of December 31, 2015 previously announced has been changed to January 7, 2016.

At the special stockholders meeting that Vapor intends to hold on January 21, 2016, shareholders will be asked to approve a reverse stock split of Vapors issued and outstanding shares of Common Stock at a ratio and effective upon a date to be determined by Vapors Board of Directors and an increase in the number of authorized shares of common stock of Vapor.

Has VPCO Found The Bottom And Ready To Gain Momentum? Find Out Here

Lilis Energy Inc. (NASDAQ:LLEX) traded down -23.04% during trading on Thursday, hitting $0.27. The stock had a trading volume of 1.43 million shares. The firm has a 50 day moving average of $0.19 and a 200-day moving average of $0.67. The stock has a market cap of $5.57 million. LLEX has dropped -66.65% during the last 3-month period. Year-to-Date the stock performance stands at -23.04%. The stock price is expected to reach $6.50 in the short term. The number of analysts agreeing with this consensus is 1. The higher estimate for the short term price target is at $6.50 while the lower estimate is at $6.50. On Sep 18, 2015, the shares registered one year high at $3.15 and the one year low was seen on Dec 2, 2015. Lilis Energy Inc. (NASDAQ:LLEX) on December 30, 2015 that it has signed a definitive agreement to merge with Brushy Resources, Inc. (Brushy) (a reporting but non-publicly traded company), a San Antonio-based oil and gas company with primary operations in the Permian Basin in West Texas. The total consideration paid in the transaction is comprised of the issuance of Lilis shares of common stock representing approximately 50% of the post-closing, common stock outstanding, and assuming and refinancing $13.55 million in debt (see Recapitalization Plan below). In addition, at the closing, Brushy will divest certain of its assets in South Texas to its subordinated lender in exchange for the extinguishment of $20.50 million in subordinated debt, payment of $500,000 in cash, and the issuance of a $1 million subordinated note.

Why Should Investors Buy LLEX After the Recent Fall? Just Go Here and Find Out

Creditors Rights Suffers a Major Depression in North Carolina – So, What can a …

On September 25, 2015, the North Carolina Supreme Court ruled in High Point Bank and Trust Company v. Highmark Properties, LLC. The long-awaited decision affirmed the enlarged the statutory application of sect;45-21.36 in three significant ways. More on that below. But first, how we got here.

The History

In 1933, the North Carolina legislature in reaction to the Great Depression enacted certain defenses against alleged abuses by lenders exercising remedies under mortgages and against guarantors and sureties. Protection was accorded a purchase money debtor under a purchase money mortgage given to its Seller. This statute was codified by the legislature as NC Gen. Stat. sect;45-21.38. The 1993 legislature also enacted NC Gen. Stat. sect;45-21.36 which applies when a lender forecloses on a deed of trust given to secure the indebtedness and subsequently sues the borrower for a deficiency.

The Supreme Court of North Carolina has consistently given broad interpretation in favor of the purchase money anti-deficiency law expressed under sect;45-21.38, but that law is narrow in its application to the seller of property who receives a purchase money deed of trust to secure a portion of the purchase price from its buyer and does not have wide application in the lending community except when REO is sold and financed.

The other depression era statute: NC Gen. Stat. sect;45-21.36 was for many years a thought to afford a defense or offset only to the borrower because of the seeming limitation by the 1933 legislature in framing the defense or offset to the mortgagor, trustor or other maker of any such obligation whose property has been so purchased (by the lender at the foreclosure sale). The statute in such situation afforded the borrower a defense in a deficiency action to show as a matter of defense and offset, but not by way of counterclaim, that the property sold was fairly worth the amount of the debt secured by it at the time and place of the sale or that the amount bid was substantially less than its true value, and, upon such showing, to defeat or offset any deficiency against him.

A plain reading of the words of limitation has persuaded most legal scholars that the application of NC Gen. Stat. sect;45-21.36 was not available to guarantors and suretys who provided additional security for the loan to a lender because such parties were not makers of the debt and were not the parties whose property has been so purchased at the foreclosure sale. Certain opinions of the North Carolina Court of Appeals had denied the right of guarantors to assert sect;45-21.36 as a defense against enforcement of the guaranty for a deficiency arising out of the sale of the security property in which the lender was the high bidder.

However, a careful reading of the North Carolina Supreme Courts holdings in the application of NC Gen. Stat. sect;45-21.38 might have signaled that the Supreme Court, given the right facts, might extend the depression era legislative protection to guarantors. In a 1938 case, the Supreme Court had opined that a guarantor could assert the protection afforded the maker of the purchase money deed of trust even though the statute did not refer to a guarantor.

The right facts have now found their way their way to the North Carolina Supreme Court and it has arguably significantly broadened the reach of the depression era anti-deficiency statute to guarantors and suretys.

In High Point Bank and Trust Company v. Highmark Properties, LLC, the facts were as follows:

  • The Bank made two loans in 2007 to a borrower secured by a first deed of trust on a parcel of property in Forsyth County and subsequently made a second loan secured by a deed of trust on an additional parcel.
  • The loans were guaranteed by four individual members of the limited liability company debtor.
  • In 2010, the debtor defaulted on the loans; the Bank sued the borrower and the guarantors on the two notes for an aggregate debt of roughly $4,900,000.
  • Meanwhile, the Bank foreclosed on both deeds of trust and was the sole bidder at the sales. The proceeds of the foreclosure sales left a deficiency of approximately $2,500,000 on the first note and $720,000 on the second note.
  • In its action on the two notes, the Bank sought judgment then decided to dismiss the borrower, presumably because the Bank was aware that the borrower would assert the statutory protection of sect;45-21.36 and defend on the basis that the sales had not brought what was the fair value of the two properties.
  • The guarantors moved to join the borrower in the deficiency action and the trial court over the objection of the Bank, allowed the joinder.
  • The trial court granted the Banks motion for summary judgment against the guarantors but left the issue open as to whether the property had been sold for substantially less than fair value.
  • A jury decided that the properties had been sold for substantially less than fair market value and determined that the first note had been satisfied because the first parcel was worth at the time of the sale, more than the debt remaining due and the deficiency on the second note was reduced because the sale resulted in less than the fair market value of that property but still less than the total debt owed on the second note.

The Bank appealed to the Court of Appeals which departed from earlier decisions of that Court and affirmed the trial court in allowing the guarantors motion to join the borrower as a defendant and to assert sect;45-21.36 as a defense to the deficiency action.

The Supreme Court in a long awaited decision released on September 25, 2015, affirmed the Court of Appeals and enlarged the statutory application of sect;45-21.36 in three significant ways.

  • First, the Court held the guarantors could join the borrower in a deficiency action and by doing so gain the borrowers right to assert the defense as a maker of the note, but in addition the Court held that even if the guarantors did not join the borrower, the guarantors could assert in their own right the anti-deficiency defense because the guarantors were among the group who enjoy protection of the statute. This statement finds no basis from the statutory language, but was determined by the Court to be so because of the presumed intent of the depression era legislation.
  • Second, the Court held that a waiver of the defense in the express language of the guaranty was not effective in that this equitable defense arising under the anti-deficiency statute was one in which public policy would be paramount. The upshot of this ruling is that all waivers of sect;45-21.36 either by the borrower or the guarantors are now totally ineffective. The court even stretched the ineffectiveness comment to forbearance agreements even though it had previously recognized a waiver in forbearance agreements of the federal statutory Equal Credit Opportunity Act. Again the court distinguished the two by saying that the Equal Credit Opportunity Act was a mere statutory provision while the anti-deficiency act was a public policy equitable measure to protect against in the Courts words overreaching lenders.
  • Third, the Court equates the bid at the sale to fair market value by interpreting broadly the phrasing of the statute substantially less than its true value to mean that in the event the property at foreclosure sale brings less than the fair market value, the defense is available and accordingly, makes the question of whether the bid at the sale was less than the fair market value an issue for a trial. The Court of Appeals had struggled in several cases with the definition of less than true value but had not equated it to fair market value.

The Court based its decision on a mandate by the depression era legislature to address specific instances of public vulnerability to lender overreach. In 1933, the stock market had crashed, property values had plummeted and many borrowers had been caught in the financial morass and defaulted on loans; foreclosures were rampant and deficiency actions common. As a result, the North Carolina legislature reacted to populist pressure to protect the public from what was then perceived to be aggressive behavior of banks. Other state legislatures enacted similar measures to protect debtors.

Likewise, in the Great Recession spawned by the financial market collapse of 2008 and the bursting of the real estate bubble, both residential and commercial property values declined substantially in nearly all US markets. In a time of declining values, lenders whose loans are based upon certain percentage of appraised value can on a foreclosure sale experience a real loss. Lenders, who are risk adverse and whose judgment in making loans is subject to questioning by federal and state regulators and bank examiners, rely on the financial strength of guarantors to protect against that potential loss of value of real estate collateral.

The High Point Bank case in regard to the protection of a payment guarantor creates a significant dilemma for a lender in the real estate secured loan. The appellate court decisions allows a guarantor to get to the jury on the question of whether the foreclosure sale brought fair market value.

What is fair market value in a foreclosure context?

In a market where property values are declining fair market value is likely to be less, perhaps substantially less, than fair market value at the time of the loan, however, the lender seeking a deficiency in such circumstances will now be compelled to let a jury decide if the sale brought fair market value. Because the appellate courts of North Carolina have held an owner of real estate is a competent witness to testify as to value, guarantors can be expected to offer the testimony of a borrower that in the opinion of the borrower the property foreclosed was worth more than the debt at the time of the sale and thereby, if the jury concurs, reduce or eliminate the deficiency. This may be so even if the lender has expert appraisal witness testimony that the fair market value of the property was no more or was in fact less than the bid amount.

Lenders typically consult appraisers in the foreclosure of commercial properties and base their bid on the appraisers opinion, but can the lender deduct expenses of holding the property for a period after the sale including maintenance, taxes and insurance? Appraisers usually calculate the holding period during which a particular piece of property in a specific market is likely to be held before it could be sold and use that calculation in the determination of value.

During the Great Recession just passed, many lenders experienced long holding periods of REO before it could be sold and in many cases sold the REO for less than the amount bid at the sale. The Supreme Courts opinion in the High Point Bank case has left open the question of is the lender entitled to reduce the bid amount by its holding cost and other expenses. Furthermore, recent opinions of the Court of Appeals have sanctioned the ability of the borrower to offer nothing more than an opinion that the property was worth more than the bid amount to defeat the lenders motion for summary judgment on the issue of the amount of the deficiency.

What is the lending community to do?

Possible solutions need to be investigated in reaction to the High Point Bank case. Posed with the new reality that a borrower or guarantor can prolong any deficiency case and send the ultimate question to a decision by a jury of twelve on opinions of fair market value, the lender may want to look to other means to try to protect itself when it decides to make a real estate secured loan, particularly in a declining real estate market or where a specific security property for various reasons, may have declined in value.

The following suggestions may or may not in the context of the High Point Bank decision, absolve a lender from this dilemma.

  • First, lenders must carefully evaluate the financial ability of the borrower and the guarantors to pay the debt if the collateral declines in value and the lender decides to abandon the collateral as a means of payment. Lenders must be prepared to sue directly on the note and the guaranty as opposed to foreclosing on the collateral and suing for a deficiency if there is a risk that the sale will result in less than fair market value. Some legal scholars have judged that the lender should pursue a judgment on the note and the guarantys and hold the collateral in reserve until it determines whether the judgment can be collected, however, the difficulty in that approach is the borrower may not maintain the collateral if it is fighting a judgment collection action. Furthermore, the borrower or the guarantors can defer any decision by conducting discovery in any suit on the note or the guarantys which will prolong that action for a significant period of time during which the collateral may decline even further in value.
  • Second, in the event the ability to collect a judgment against the borrower and or guarantors is not feasible, then the lender must give more consideration to finding a bidder for the property at the sale so that the lender does not have to be the sole or high bidder. A third party or legitimate straw man bidder whose bid is the highest bid at the sale avoids the application of the anti-deficiency statute and establishes fair market value for the deficiency action without the ability of the borrower or the guarantors to attack the sale price. This is so because the Act only applies when the lender is the high bidder. Under the circumstances of a non-conclusive third party bid, the borrower and the guarantors cannot offer evidence that the bid was not fair market value.
  • Third, a lenders inability to now rely on a waiver of the anti-deficiency law as a defense in a guaranty may need to look to the legislature to amend the depression era legislation. In many other states, depression era legislation has been abolished or replaced by a more modern approach to lending and the reality that property values like the stock market, go up and down. As we have seen in the last decade property values both residential and commercial, decline in bad markets and borrowers are just as guilty of speculating on property values as lenders are guilty of making bad decisions on whether to lend to a particular borrower or assess a guarantors ability to pay in the event of default. The statute could be amended to make clear that its application excludes guarantors from the property value question or establish a quantitative methodology for determining fair value (which may not be fair market value) of a property sold at foreclosure taking into account the holding period cost and other costs prior to the anticipated sale of the REO.
  • Lastly, lenders must look more carefully at alternative dispute resolution. Many lenders have chosen to include in their loan documents a mandatory arbitration clause. Courts have upheld mandatory arbitration clauses and lenders may consider whether it is better to place the decision of a deficiency in the hands of an arbitrator rather than a jury of twelve, many who may not be familiar with property values or the methodology of determining property values, to determine whether the borrower or a guarantor is allowed an offset or defense to the foreclosure sale bid. This will require in the case of many loan documents and guarantys revisions of the remedies sections of such instruments.

Cosgrave hit by UK court’s ruling on £14m loan

The court agreed to a request for an application to be made to the English courts for administrators to be appointed over companies in which Mr Cosgrave and the others are involved. The companies are behind a major London Docklands site. The application is being made on foot of £31m (EUR42m) owed under a mezzanine loan.

Mr Cosgrave is a director of the Dublin-based Cosgrave Developments group. It was one of the biggest boom-time construction firms. The company is not involved in the Jersey case, however.

A £14.5m mezzanine loan was granted in 2014 to a Jersey company called Glengall Bridge Holdings, and with a startling interest rate, the outstanding amount has ballooned to £31.3m (EUR42m).

The finance was provided by Luxembourg-based company Siena, which is owned by Meadow Real Estate Fund II, an entity thats managed by New York-based Meadow Capital Management. Five other companies – all based in Jersey – acted as guarantors for the finance.

Mr Cosgrave and his wife are shareholders in the Jersey companies. So too is Mary Connolly, and a Helen Conlan. Mr Neville OBoyle is a shareholder as trustee of the Mill Harbour Trust. Mr OBoyle is a co-founder of Irish firm Key Waste.

At the time the mezzanine loan was advanced to Glengall, there was an existing loan outstanding in favour of Bank of Scotland, and the mezzanine loan was subordinated to this.

Less than five months after the mezzanine finance was granted, Glengall was in default on the loan. But Siena remained supportive of the Jersey companies until September last year, when it issued a formal demand for repayment. The mezzanine loan carries a fixed interest rate of 24.63pc, compounded quarterly, rising to 29.63pc following a default.

Enforcement was permissible by November 14. The senior loan owed by Glengall to Bank of Scotland was also purchased by an entity related to Meadow. The Jersey companies, including Glengall, are also in default of that loan, which amounts to £16.6m (EUR22.3m).

Last November, Irish accountant Patrick Conlan, who is a director of London firm Glenart, of which Mr Cosgrave is also a director, complained in a letter of what he said was the failure of both secured lenders to engage with a view to a consensual outcome, and gave notice that the respondents could commence insolvency proceedings in Jersey.

Mr Conlan also expressed concern that the appointment of administrators by the English court would crystalise significant tax liabilities prejudicial to the existing unsecured creditors and shareholders.

The site and properties at Glengall Bridge Estate was valued in November at £54.5m. Heads of terms had already been agreed by late last year to sell part of the site in London to Perveril Securities, for £30m. An indication of a £16m offer for the remainder of the site has also been received from another firm. But the combined £46m would be insufficient to pay the secured creditors.

The respondents sought to have the appointment of administrators adjourned in an effort to reach a consensual outcome. Siena said no such outcome would be possible. The Jersey court acceded to the request from Siena to have administrators appointed.

We do not regard it as a proper use of the courts powers to grant a two-and-a-half month adjournment in order, effectively, to put pressure on a creditor to enter into a consensual arrangement with its debtor, said the court.

Irish Independent

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