MyTravel Group Bondholders Disappointed with High Court Ruling

The ad hoc convertible bondholder committee representing holders of MyTravel Group plc's GBP 216 million 7 per cent Convertible Bonds due 2007, has expressed disappointment with the High Court's decision to rule the company's scheme of arrangement unlawful. The committee, represented by Cadwalader, Wickersham & Taft LLP and Houlihan, Lokey, Howard & Zukin (Europe) Limited, believes that the judge's finding that bondholders have no present interest in the company's assets is incorrect and will continue to fight to protect the rights of MyTravel's bondholders in the Court of Appeal.

Key Takeaways:

• The ad hoc convertible bondholder committee is disappointed with the High Court's decision to rule MyTravel Group plc's scheme of arrangement unlawful.
• The committee disputes the judge's finding that bondholders have no present interest in the company's assets.
• The company intends to rely on this finding to seek approval of a new scheme, despite its unlawfulness.
• The committee believes this finding raises important issues for all holders of publicly traded debt securities in the European bond markets.
• The committee has resolved to continue its fight to protect the rights of MyTravel's bondholders in the Court of Appeal.
• The committee had always preferred a consensual outcome but will now pursue a court-based outcome.
• The committee was not informed of the alternative scheme of arrangement before its announcement.

Statistics:

• GBP 216 million: the value of the 7 per cent Convertible Bonds due 2007.
• 2007: the due date for the Convertible Bonds.
• 7 per cent: the interest rate of the Convertible Bonds.

Sources:

• Business Wire, "MyTravel Group Bondholders Disappointed with High Court Ruling" (Nov 24, 2004)
• Cadwalader, Wickersham & Taft LLP, press release (contact details provided)