Francis Tregear QC was appointed to act as expert in English law for the prevailing party (“JPA”) in a dispute heard by the Hon. Bankruptcy Court Judge David S Jones for the Southern District of New York.
The case concerned English law relating to mortgages and the equitable principles applicable to mortgages. Relevant English law was to be applied in connection with the aircraft financing for the purchase of two Airbus 350-941s.
The dispute was between the mortgagee and JPA who were debtors/mortgagors under security agreements (governed by English law) of statutory rights under aircraft leases. The mortgagee (who had only recently purchased the original creditor’s debt) unsuccessfully attempted to prevent JPA from seeking relief under Chapter 11 of the US Bankruptcy Code under which it would be able to sell the rights legal mortgages at a price that guaranteed payment of all of the senior and junior secured debt.
The mortgagor was trying to prevent the sale so that he could conduct his own sale process, which was arguably far less beneficial to creditors other than himself.
At the first hearing, the mortgagee attempted to dismiss JPA’s proceeding on the grounds that it had no title to the secured rights. However, the Court found, based on Francis’ written and oral evidence (with which the mortgagee’s adjuster agreed), that the equity of repayment of the secured property constituted sufficient ownership interest for the procedure continues.
At a second hearing, the Court held, in line with Francis’ testimony, that JPA had the right to sell the secured assets and that the mortgagee’s attempts to prevent JPA from selling the secured assets were invalid under English law. which excluded hooves or hobbles. on redemption equity. Under English law and section 91 of the Law of Property Act 1925, JPA had redemption equity as well as an equitable right to redeem by sale the secured assets by redemption action. Accordingly, the court issued an order authorizing the sale of the aircraft and the rights secured by the English law warranty agreements.
The judgment and transcript of the decision can be viewed here and here.