Preventing an uncontrolled enforcement process

Jurisdictions involved

Europe, Africa, Asia, Australia and North America

The business and background

The business was established in late 2000 and had since grown to a c.US$3.1bn business trading across agrifoods, resources and consumer brands with c.100 corporate entities located across the continents of Europe, Africa, Asia, Australia and North America. 

Given the global nature of the Group’s business, it was exposed to foreign exchange risk which it historically sought to manage by purchasing and hedging forward exchange contracts on currencies and commodities.

What we did

We were engaged by the principal shareholder and CEO of the group to provide support regarding an urgent application to Court for provisional liquidation. This was to protect the group against material loss claims from foreign exchange (“FX”) derivative counterparties (consisting of over 40 international banking and financial institutions) in relation to trades entered into by the group’s FX trading desk that had become “out of the money”. Our client was concerned that there was a risk that each of these creditors at any point may seek to commence separate enforcement proceedings. Any such action by one creditor, or a small group of creditors, could allow them to gain an unfair advantage against others and lead to an inefficient and value eroding process.

We quickly mobilised an experienced team to support our client with the following objectives:

• Preparing a report to Court to support provisional liquidation application in the UK, Dubai and Singapore.
• Liaise with / direct Counsel to prepare witness statements in support of the Court applications.
• Manage relationships and communications with over 40 international banking and financial institutions.

The outcome

Ultimately, due to an inability to access pertinent group financial information in a timely manner as a result of the global lock down caused by the COVID-19 pandemic, our client resolved instead to place the holding company, PCPL into voluntary liquidation. We helped facilitate this process.

We successfully assisted our client in preventing an uncontrolled enforcement process by a diverse group of creditors pursuing different agendas which would have led to significant value erosion across the rest of the group.