13 December 2012
When looking at a distressed credit, determining creditor priority becomes key. The focus is not just on realising value, but on who has control of that realisation process. In a recent case (Saltri III Ltd v MD Mezzanine SA Sicar & Ors  EWHC 3025) the High Court in London was asked to consider whether action taken by a group of Senior Lenders to enforce their rights under a typical intercreditor agreement with a sale to an SPV and a release of the underwater Mezzanine debt was valid. The challenges to the enforcement by the Mezzanine Lenders were levelled not at the Senior Lenders themselves, but at the Security Trustee. As matters transpired these challenges were unsuccessful.
Security Trustees: the in-betweeners?