B e f o r e :
DEPUTY INSOLVENCY AND COMPANIES COURT JUDGE AGNELLO QC ____________________
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Mr Mark Arnold QC (instructed by Weil Gotshal & Manges (London) LLP) for the Applicants Mr Michael Hammersley, acting in person Hearing dates: 23 April 2020, 11 May 2020 and 22 May 2020 ____________________
HTML VERSION OF JUDGMENT ____________________
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Covid-19 Protocol: This judgment was handed down by the judge remotely by circulation to the parties' representatives by email and release to Bailii. The date and time for hand-down is deemed to be 10:30 am on 20 July 2020.
Introduction
This is the hearing of the application dated 27 February 2020 of the Applicants, the Former Joint Administrators ('the Former Administrators') of the above-named company (Paragon) seeking an order specifying the time for their discharge to take effect pursuant to paragraph 98(2)(c) of Schedule B1 of the Insolvency Act 1986. The administration order was made by Mrs Justice Rose (as she then was) on 23 May 2017. The administration came to an end on 31 May 2019 when it entered into creditors voluntary liquidation with David Philip Soden and Nicholas Guy Edwards being appointed as joint liquidators.
The discharge is opposed by Mr Hammersley, a member of Paragon. He filed a 'Preliminary Application' claiming to be a member of Paragon and seeking to oppose the discharge application. By order dated 12 March 2020 of Deputy ICC Judge Barnett, Mr Hammersley was joined as a respondent and he has filed extensive evidence as well as skeleton arguments in support of his opposition. He has put forward many reasons as to why I should not grant the discharge and I will consider the grounds he relies upon below. However before doing so, it is useful to set out the background facts and also to set out the law in relation to discharges under these provisions. Additionally, I have before me notices from various other shareholders who support the position of Mr Hammersley although none of them have applied to be joined.
I am grateful to Mr Arnold QC for his submissions and for answering the questions I put to him. I also need to thank Mr Hammersley who presented his arguments carefully and comprehensively whilst at the same time striving in general not to repeat the points he was making.
This matter first came before me for final hearing on 23 April 2020 when Mr Hammersley sought to file and rely upon further evidence. That application was opposed by Mr Arnold on behalf of the Applicants. Additionally, it appeared to me that the time estimate of one hour was inadequate and accordingly I adjourned for a longer hearing date. I also gave permission to Mr Hammersley to file the additional evidence and gave directions enabling the Applicants to reply to the further evidence of Mr Hammersley. The matter then came back before me on 11 May 2020 for half a day. I then heard further submissions on 22 May 2020.
Background facts
The US Chapter 11 proceedings
Paragon is the head of a corporate group ('the Group'). According to the witness statement of David Soden, dated 27 January 2020 together with its subsidiaries, it was a leading provider of standard specification offshore drilling services. From about 2014, the depression in global prices contracted the demand for the Group's services.
Some time prior to the application to the English High Court for an administration order, Paragon had sought protection pursuant to the Chapter 11 laws of the US, at the US Bankruptcy Court in Delaware. The case was assigned to Judge Sontchi and as I understand, the Judge has heard and dealt with all the applications arising in relation to Paragon (including Paragon 2). On 14 February 2016, Paragon and its Chapter 11 debtors filed the First Chapter 11 Plan with the US Bankruptcy Court. Two further proposed plans followed, being the Second Chapter 11 Plan and the Modified Second Chapter 11 Plan. A Third Plan and then a Fourth Plan were subsequently submitted to the Judge. During this time, as explained in the first witness statement of Mr Todd Strickler dated 16 May 2017 (the Company Secretary ), the parties were in negotiations and discussions with various creditors. One of the earlier Plans enabled there to be a distribution to the shareholders. On 2 May 2017, the Fifth Plan was presented to the US Bankruptcy Court after a court ordered mediation which included the ad hoc committee of Term Loan Lenders, the steering committee of RCF Lenders and the Official Committee of Unsecured Creditors. As will become clearer below, the shareholders, as the equity, did not form part of the court ordered mediation because the US Bankruptcy Court had rejected applications to appoint an Official Equity Committee.
The terms of the Fifth Plan are set out in summary at paragraph 28 of Mr Strickler's witness statement dated 16 May 2017 and are in summary:-
In essence, the Fifth Plan was a debt for equity swap involving the transfer of certain assets to the creditors, including cash payments, equity and reinstated debt as well as certain other interests, in consideration for the release of certain of Paragon's financial liabilities to creditors. Paragon owed these creditors a total sum of approximately US$2.4 bn. The Fifth Plan provided for the sale and transfer of Reorganised Paragon. This was a newly incorporated entity created as a subsidiary of Paragon and thereafter its shares were to be distributed amongst Paragon's senior creditors, as set out in the summary of the Fifth Plan above. It was this structure which was the debt for equity swap. Reorganised Paragon was to hold Paragon's interest in the Prospector Group. Paragon had a 100% shareholding in Prospector Offshore Drilling SA ( 'Prospector')(together with its operating subsidiaries, 'the Prospector Group').
The Fifth Plan also included a rationalisation of the inter-company liabilities which allowed for their reduction from US$820m to US$500m approximately. These claims against Paragon would be transferred to Reorganised Paragon by means of a Loan Note Instrument. Instead of Paragon owing money to its subsidiaries, these would be transferred to Reorganised Paragon which would take on these claims.
On 23 May 2017, the application for an administration order was heard before Mrs Justice Rose (as she then was). As was clear from the evidence submitted in support of the administration order as well as from the skeleton argument filed by Leading Counsel on behalf of Paragon, the details of the Fifth Plan were placed before the Judge. Additionally, the evidence of Paragon's insolvent position was also before the Judge. Mr Hammersley had written a letter to the Judge which was also brought to her attention and considered by the Judge. These matters are clear from reading the witness statement of Mr Strickler, Counsel's skeleton argument as well as having read the transcript of the hearing before Mrs Justice Rose.
The evidence of insolvency was set out in the witness statement of Mr Strickler of 16 May 2017. At the date of the hearing for the administration order, the Group had approximately US$1.4 billion of secured debt, US$1.02 billion of unsecured notes and US$14 million in general unsecured claims outstanding. Paragon had therefore debts of approximately US $2.4 bn and cash of approximately US$345 million.
The principal liabilities of Paragon to non-Group entities as at 16 May 2017 were summarised by Mr Strickler as follows:-
Revolving credit facility ( referred to above as the RCF Lenders) – US$755,764,000
Term loan facility ( referred to above as the Term Loan Lenders) – US$641,875,000
6.75% senior notes (referred to above as the Senior Noteholders) -US$474,636,199
7.25% senior notes (referred to above as the Senior Noteholders) - $546,114,112
Mr Strickler goes through in his witness statement, the underlying financial documents in relation to the debts set out above. Paragon was at that date the only borrower under the RCF with loans outstanding pursuant to a senior secured revolving credit agreement dated 17 June 2014 between Paragon, Paragon Finance Company each as borrower and the lenders from time to time thereunder with JP Morgan Chase Bank NA as administrative agent (the RCF Agent). Under the terms of the RCF agreement, Paragon and certain of its subsidiaries granted security over substantially all their assets for the benefit of the RCF lenders, with some limited exceptions. Pursuant to a subordination agreement dated 18 July 2014 between the subsidiaries, Paragon and the RCF Agent, the subsidiaries agreed to subordinate their intercompany claims against Paragon to the claims of the RCF lenders. The security package as a whole of the RCF lenders means effectively that they have the benefit of first priority replacement liens over each of the Chapter 11 Debtors' (including Paragon) unencumbered property (including cash) and junior replacement liens on certain of the US Chapter 11 Debtors' unencumbered property. The commencement of the US Chapter 11 proceedings triggered an event of default in respect of the RCF lending.
The sums due under the Term Loan arose pursuant to a Guaranty and Collateral Agreement ('GCA' or 'Term Loan Guaranty') whereby the term loan agreement dated 18 July 2014 was provided to Paragon Offshore Finance Company. Under the terms of the GCA, entered into by Paragon and other Chapter 11 Debtors, Paragon guaranteed the liability under the Term Loan, by way of a primary obligor. This obligation of Paragon was secured to the extent possible after that of the RCF lenders. The commencement of the US Chapter 11 proceedings triggered an event of default for the Term Loan irrespective as to it being granted to Paragon Offshore Finance Company. This led to approximately US$1.4 bn of secured debt becoming due and payable.
Paragon was also the primary borrower in relation to a series of two unsecured senior loan notes, the 6.75% senior loan notes (US$456,572,000) and the 7.25% senior loan notes (US$527,010,000). The commencement of the US Chapter 11 proceedings triggered an event of default under these loan notes and the current sums outstanding under the loan notes are set out above.
There was also at the time of the application for an administration order the sum of approximately US$828,440,000 owed by Paragon to other Group companies. As is set out in paragraph 51(a) of Mr Strickler's witness statement, section 4.6 of the Fifth Chapter 11 Plan envisaged that the intercompany debts would be paid, adjusted, continued settled, reinstated, discharged, eliminated or otherwise managed such that the only Intercompany Debt outstanding as at the effective date of the Fifth Chapter 11 Plan would be an amount owed to Reorganised Paragon. As these debts were subordinated to Paragon's obligations pursuant to the RCF lending and the Term Loan, the intercompany liabilities were in essence of no economic value. The general unsecured claims filed against Paragon in the US Chapter 11 are in the aggregate amount of US$370,098.
Paragon's total cash balance of around US$345m will not be sufficient to cover the total obligations of approximately US$2.4 bn. The 2016 accounts show a net deficiency of US$1,097,534,000. In his grounds of opposition to the discharge, Mr Hammersley seeks to challenge the deficiency and also guaranty indebtedness. I will deal with these issues below.
The purpose of the administration was to effect and carry out the terms of the approved US Chapter 11 Fifth Plan. This required the debt for equity swap which was a term of the Fifth Plan. As is explained in the witness statement of Mr Strickler, the debt for equity swap required a new company (Reorganised Paragon) to be created as a direct subsidiary of Paragon. Under the law in this jurisdiction, it is not possible for Paragon to amend its articles and seek to issue new equity to creditors under the US Chapter 11 proceedings without shareholder consent. As is set out in the witness statement of Mr Strickler (as well as in the Chapter 11 Fifth Plan), Paragon is insolvent. Accordingly, as set out by Mr Strickler, Paragon's equity has no value and therefore the board of directors of Paragon considers that it is neither necessary nor appropriate to seek shareholder consent. The value of Paragon and the Group is held for the benefit of creditors. The granting of the administration order would therefore enable the proposed administrators to carry out the UK Sale which was part of the Fifth Plan thereby enabling the debt for equity swap to occur without shareholder consent. These issues were raised by Mr Strickler in his witness statement and therefore were before Mrs Justice Rose on 23 May 2017.
As I have set out above, all these matters relating to Paragon's insolvency, the proposed UK Sale, and the purpose of the proposed administration were before the learned Judge. Pursuant to paragraph 11 of schedule B1 of the Insolvency Act 1986, in order for the Court to be able to exercise its discretion in paragraph 13 as to whether or not to make an administration order, there are two jurisdictional hurdles. Firstly, the Court has to be satisfied that the company is or is likely to be unable to pay its debts. This requires the Court to be satisfied that either of the insolvency tests, being either 'cash flow' insolvent or 'balance sheet' insolvent, is met (see further paragraph 11(1) and section 123 of the Insolvency Act 1986). Secondly, the Court needs to be satisfied that the administration order is reasonably likely to achieve the purpose of the administration. The Judge was satisfied that these hurdles had been met as she exercised her discretion and made the administration order.
There has been no application seeking to appeal from the order of Mrs Justice Rose. That remains the position to date. After the making of the administration order, the Former Administrators effected the UK Sale with the relevant transaction being effective as at 18 July 2017 when the Fifth Plan as modified became effective. The administrators' proposals to creditors were made on 3 August 2017 (this being a time extended by order of Mrs Justice Rose).
Meanwhile, the Fifth Plan was approved by Judge Sontchi on 7 June 2017. Mr Hammersley opposed the approval of the Fifth Plan. His objections were dismissed. The Fifth Plan did not provide for any distribution to the shareholders. As I have set out above, it is clear that Judge Sontchi considered not only that Paragon was effectively hopelessly insolvent but that equity was so to speak, 'out of the money' significantly. I have set out later on in this judgment passages from the various judgments of Judge Sontchi dealing with this issue.
As is set out in the evidence of Mr Soden, dated 27 February 2020, the UK Sale which had been provided for in the Fifth Plan was originally intended to include the sale and transfer to Reorganised Paragon of Paragon's interest in the Prospector Group. However, the shares in Prospector had been pledged and certain rigs operated by certain Prospector subsidiaries were leased pursuant to sale and leaseback agreements. The relevant necessary consents of the Pledgee and Lessors (SinoEnergy) had not been obtained before the time arrived for the UK Sale to take place. This led to a modified Fifth Plan being presented to Judge Sontchi at a hearing on 17 July 2017. The modifications were approved by the Judge. Mr Hammersley opposed these modifications on various grounds. The Judge rejected all of these grounds. The modifications enabled a Management Agreement to be entered into which would enable Reorganised Paragon to manage the Prospector assets and enjoy the same economic benefits it would otherwise have enjoyed if the transfer of the Prospectors Group shares had taken place. The Management Agreement was not seeking to alter Fifth Plan. The outcome remained the same, being a debt for equity swap.
The UK Sale was effected but excluding Prospector. The Transaction was implemented on 18 July 2017, when the Fifth Plan as modified became effective.
Paragon and its Prospector subsidiaries thereafter sought fresh Chapter 11 protection as against the threat of pledgee/lessor enforcement ('Paragon 2'). Prospector had not been a party to the first Chapter 11 proceedings ('Paragon 1') This new Chapter 11 process, the Paragon 2 proceedings went before Judge Sontchi on 30 November 2017. Mr Hammersley attended this hearing and again sought the appointment of an equity committee, and subsequently filed a motion to revoke the order authorising modification of the Fifth Plan. The Judge dismissed his objections. A settlement agreement was entered into between the pledgee/lessor who thereby consented to the transfer of Prospector. This settlement agreement was approved by the US Bankruptcy Court at a hearing on 5 March 2018 before Judge Sontchi. The Paragon 2 proceedings were also dismissed once the settlement agreement had been approved.
The Prospector transfer to Reorganised Paragon was then effected by the Former Administrators on 26 March 2018. The consideration for this transfer, as envisaged in the Fifth Plan, was the release of US$191 unsecured debt owed by Paragon to Reorganised Paragon. This sum was part of what remained of the intercompany liabilities. The position of these intercompany liabilities has been described above at paragraph 16. In accordance with the Fifth Plan and the UK Implementation Agreement (which set out the steps which had to be taken by the Former Administrators to carry out the Fifth Plan) the Loan Note Instrument was entered into in order to reduce Paragon's intercompany liabilities from approximately US$828 million to US$500 million and those claims against it to be transferred to Reorganised Paragon. The relevant clauses are section 4.6(a) of the Fifth Plan and clause 6.1(a) of the UK Implementation Agreement. Although I do not have to set out those clauses, they demonstrate, despite the points raised by Mr Hammersley, that the treatment of the intercompany liabilities, was part of the Fifth Plan and is therefore also reflected and implemented by the UK Implementation Agreement.
In accordance with their duties and obligations pursuant to Schedule B1, the Former Administrators filed their Progress Report dated 19 June 2018 and thereafter took steps for the realisation of further assets. Four further Progress Reports were filed by the Former Administrators. The Administration order was extended by way of creditor consent on 4 May 2018. In the final Progress Report dated 15 May 2019, the Former Administrators gave notice of the move of Paragon from administration to creditors' voluntary liquidation. The Former Administrators became joint liquidators on 31 May 2019. I do not need to deal with the contents of those reports or the actions of the Former Administrators beyond the period described above, because their conduct after the implementation of the Chapter 11 Fifth Plan by means of the UK Implementation Agreement and related documentation does not form the subject of the challenges made by Mr Hammersley. The Final Report referred to the Former Administrators seeking to make an application seeking their discharge pursuant to paragraph 98(2)(c) of Schedule B1. That is the application now before me.
Law and Practice relating to discharge pursuant to paragraph 98 Schedule B1
The relevant parts of paragraph 98 are as follows –
…
(3A) …
For completeness, the relevant paragraphs of paragraph 75 are as follows :-
(c) the liquidator of the company,
(d) a creditor of the company, or
As Mr Arnold points out, discharge frequently follows very shortly after the administration comes to an end. It is treated as the normal course of events without the administrators being required to demonstrate or establish some prejudice if they do not receive their discharge at a particular time. This is clear from the case of Re Angel Group [2016] 2 BCLC 509 , a decision of Mrs Justice Rose, where she noted that no cases had been cited which delayed discharge for more than three months. In considering the position relating to when it is not clear whether a claim, if brought would fall within paragraph 75, the learned Judge stated, that in the event that such a claim, '…is not included within para 75, then it is not right for this court to side-step that exclusion by postponing indefinitely the administrators' discharge' (paragraph 48). It is important to note the interaction as between the discharge provisions and paragraph 75. The latter provision expressly preserves a claim against the administrators even if they have been discharged. The limitation on this ability to pursue former administrators is that, after discharge, an application must be made to the Court for permission to bring any claim pursuant to paragraph 75 against the discharged administrators. In determining whether the Former Administrators should obtain their discharge, I bear in mind that the discharge itself does not deprive a person who can satisfy the Court in relation to an application for permission that such a claim pursuant to paragraph 75 should proceed. I also bear in mind that no paragraph 75 application has been issued. Mr Hammersley seeks in his grounds the appointment of an independent liquidator as part of his objections to the discharge.
The objections raised by Mr Hammersley
Mr Hammersley has filed two statements where he sets out his grounds. He has also filed two skeletons dealing with his grounds. His opposition to the discharge is, in my judgment, based upon his belief that the shareholders of Paragon should have received a return under the Fifth Plan and that the fact that no return is forthcoming is something for which the Former Administrators are to blame. There is currently no application pursuant to paragraph 75. Mr Hammersley believes that the interest of Paragon in its Prospector subsidiaries should have been available in some way for the benefit of the shareholders. He therefore maintains that the Former Administrators have transferred the interest of Paragon in Prospector in some way depriving the shareholders from sums ranging from US $600-700 million. There have been various complaints made to the licensing body of the Former Administrators. Additionally, Mr Hammersley makes some wide ranging allegations as against both solicitors and Counsel acting on behalf of Paragon. I will deal with these later in this judgment, but as I remarked during the course of the hearing, raising the issue of fraud is a very serious matter and full particulars need to be provided. No such particulars appear in Mr Hammersley's evidence. His allegations appear to be that shareholders like himself have some entitlement to assets which belong to Paragon. As the Fifth Plan specifically provides for no return to shareholders, then in some way, he asserts the actions of the Former Administrators has deprived the shareholders of some entitlement. As there has been no such return to shareholders, Mr Hammersley raises the issue of fraud or fraudulent conduct or misconduct by the Former Administrators. As appears from the matters I deal with below, Mr Hammersley appears to have an inability to accept that the evidence is against him on the issues he raises. In fact, as is demonstrated below, he has raised many of the issues which form the basis of his grounds before me on various occasions before Judge Sontchi who has dealt with them on each occasion by rejecting the arguments of Mr Hammersley. I will go through the grounds he raises, although some of the grounds raised are somewhat interlinked.
(1) Paragon was not insolvent as at the date that the administration order was made ( 23 May 2017)
In his first skeleton, Mr Hammersley submits that Paragon was not insolvent because he says that there is a missing sum of US$800 million and the existence of this sum means that there would have been a return to the shareholders. He disputes that the sums claimed under the Term Loan Guaranty are liabilities for which Paragon is liable for and that these should have been valued at zero. At paragraphs 11-17 above, I set out in some detail the liabilities of Paragon as presented in the evidence placed before Mrs Justice Rose. I have set out in some detail above the evidence presented by Paragon to the Court on 23 May 2017.
On the basis of the evidence before the learned Judge, Mrs Justice Rose made an administration order. Although she did not give a detailed judgment at the end of the hearing, it is clear from reading the transcript that she was satisfied that Paragon was insolvent. That is one of the jurisdictional hurdles set out in paragraph 11 of Schedule B1 and therefore she could not have made the order unless this hurdle was met. She referred to evidence filed during the hearing which makes it clear that this hurdle was met in her judgment. Accordingly, in my judgment, I am not entitled to go behind that judgment. There is no appeal from the order made by the learned Judge.
In his skeleton, Mr Hammersley seeks to assert that there was some fraud in relation to the application made. As I stated during the hearing, allegations of fraud need to be properly and carefully particularised. In my judgment Mr Hammersley has failed to substantiate his wide ranging allegations of fraud. For example, he has not explained just why he can assert that Paragon was not liable pursuant to the Term Loan Guaranty. As I set out above, under its terms, Paragon is liable as a primary obligor. The liability was triggered when the US Chapter 11 (Paragon 1) proceedings were issued. Moreover, this liability was in the evidence as being a liability of Paragon in the Fifth Plan. This was before Judge Sontchi. Mr Hammersley has presented no evidence as to why this is not a liability. Although Mr Hammersley did not attend the hearing before Mrs Justice Rose (which he was entitled so to do) he sent a lengthy letter to which the Judge was expressly referred to by Leading Counsel on behalf of Paragon. Therefore, its contents were considered by her. There are no grounds which entitle me to go behind the judgment of Mrs Justice Rose.
Despite my determination that there are presented before me no grounds which would justify going behind the order of Mrs Justice Rose, I nevertheless, also considered carefully the evidence which was presented before the learned Judge relating to the insolvency of Paragon. I have summarised this above in paragraphs 11 – 17. There is in my judgment no evidence to support Mr Hammersley's assertion that Paragon was in some way not liable for the debts of the subsidiaries which formed part of the Chapter 11 process. I have already referred to the evidence establishing the clear liability arising under the terms of the Term Loan Guaranty. The liabilities set out in the witness statement of Mr Strickler totalled US$2.4 bn. This was made up with the RCF agreement, the Term Loan Guaranty and two series of senior loan notes. Additionally, there was also a sum of US$370,098 owed to unsecured creditors. The deficiency is at least US$1,097,534,000. However there is no evidence of the US$800 million which Mr Hammersley alleges would have meant that Paragon was solvent. On the sums set out above, even if there was such a sum, it would still not mean that Paragon was solvent. The deficiency is larger than US$800 million.
As Mr Arnold points out, the issue relating to the insolvency of Paragon had been raised frequently by Mr Hammersley in the US bankruptcy proceedings. Judge Sontchi has considered this argument on several occasion and has effectively dismissed the submission that Paragon was solvent. Mr Arnold took me to the specific passages in the hearings before Judge Sontchi.
On 27 March 2017, in a hearing before Judge Sontchi, Mr Hammersley sought the appointment of an Official Equity Committee. This would, as I understand, have enabled funding to be made available for the Committee and its representation as well as other consequences. Judge Sontchi refused to direct the appointment of an Official Equity Committee. The Judge rejected the submission by Mr Hammersley that Paragon was solvent or that there would be any return to the shareholders. In rejecting the application made by Mr Hammersley, the Judge stated as follows, at page 68,
' …The problem is twofold; one, equity is so under the money -- out of the money, excuse me, or underwater that it would take, literally, a billion dollars or significantly more, maybe a billion three, a billion four, to put equity in the money. That is a huge amount of money that will have to come into the estate to put equity in the money based on increasing the amount of value available to get from Noble. Based on my years of experience that's not a settlement number that you would ever get from Noble. That's a number that will require litigation and victory.'
Also at page 71, '..So I think the adequate representation point is important, but not sufficiently significant to overcome the fact that equity is simply out of the money in this case.'
On 7 June 2017, at the hearing when Judge Sontchi approved the Fifth Plan, Mr Hammersley made representations objecting to the approval where he had sought to persuade the Judge that the values provided were effectively such that equity did have an interest. In other words, yet again, Mr Hammersley sought to argue that Paragon was solvent and therefore the shareholders had an interest. As the transcript demonstrates, Mr Hammersley also asked questions of various witnesses challenging the valuations in relation to the value of the assets of Paragon. Mr Hammersley believed, as he sought to persuade me, that there were sums not accounted for which created his US$800 million. Mr Hammersley's arguments relating to valuation were rejected by Judge Sontchi .
At page 149 of the transcript the Judge dealt with valuation issues which had been raised.
It is clear from these two passages from the two judgments of Judge Sontchi that the Judge was satisfied not only that Paragon was insolvent, but that he also accepted the valuation evidence which had been presented by the Debtor (Paragon). Before me Mr Hammersley sought to argue on the basis that the book value demonstrated that there were sums unaccounted for by the Former Administrators. Judge Sontchi had already dealt with such an argument. It is in my judgment, as set out by Judge Sontchi, the fair market value which is applicable. This is because a book value in itself does not actually represent the actual value. In my judgment there is simply no evidence which demonstrates that there are further sums available by way of assets of Paragon such that there would be a surplus available to the shareholders.
On 30 November 2017, Judge Sontchi heard a further application by Mr Hammersley seeking the appointment of an Official Equity Committee in relation to Paragon 2. The Judge rejected that application and in doing so, he stated in his judgment at page 23 of the transcript,
(ii) make any other distribution or transfer contemplated by this Plan on behalf of Paragon Parent, and Reorganized Paragon shall enter into the Take Back Debt Agreement, among other documents, with the holders of Allowed Revolver Claims and Allowed Term Loan Claims, as applicable.