A decision of the English Commercial Court last year emphasises that a foreign restructuring/composition plan will not automatically discharge a debtor from liability under a contract governed by English law. In certain
circumstances this may enable a subsequent purchaser of the distressed debt to enforce against the debtor and obtain a judgment for the full value
of the debt plus interest. Roger Kennell and Patrick Elliot of Brown Rudnick (London) report on the case.
In Global Distressed Alpha Fund I Limited Partnership v PT Bakrie Investindo1 (“Bakrie”)the facts were as follows:
• The Defendant (“Investindo”)was and is an Indonesian entity and part of the Bakrie
Group, which owned and controlled by the Bakrie family.
• Investindo wished to raise finance by the issue of $50m 9.625% guaranteed notes (the
“Notes”), which it did via a Dutch SPV in 1996 pursuant to a Fiscal Agency Agreement
(the “FAA”). The Notes were due to mature in 1999 and repayment was guaranteed by Investindo under a Deed of Guarantee. Both the FAA and the Guarantee were subject to ....
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