Clifford Chance
GHG Theatre Hospitals: Voting rights and disenfranchisement of issuers and sellers in the capital markets
28 August 2013
In Citicorp Trustee Company Ltd v. Barclays Bank PLC & Ors [2013] EWHC 2608 (Ch) (the "GHG Theatre Hospitals" case) the High Court took a novel approach to ensuring that all interested parties to a transaction were bound by the judgment. Apparently of its own motion, the court had a junior noteholder identified and joined to the case as a representative of its class. Although it took no part in the proceedings, the class is now bound by the judgment. The court also confirmed that common provisions disenfranchising notes held by the Issuer and Seller in a securitisation work as drafted and confirmed that contracts conferring an economic interest in securities (including the right to direct votes) are not effective to transfer beneficial ownership.
