US Bank Trustees Ltd v Titan Europe 2007-1 (NHP) Ltd & Ors
2014
CHANCERY DIVISION
United Kingdom
CORAM
- MR. RICHARD SNOWDEN QC
Areas of Law
- Contract Law
- Commercial Law
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
The claimant sought judicial interpretation on the Servicing Agreement related to financial notes governed by English law. Key issues included identity of the Controlling Party, requirements for Rating Agency confirmations, the role of Note Trustee in approving a successor Special Servicer, and conditions for replacing the Advance Provider. The court held that the Issuer is the Controlling Party and clarified the procedures for terminating the Special Servicer's appointment.
Judgment
RICHARD SNOWDEN QC :
This is the expedited trial of a Part 8 Claim issued by the Claimant (“the Note Trustee”) as the trustee of a series of notes (“the Notes”) issued by the First Defendant, Titan Europe 2007-1 (NHP) Limited (“the Issuer”). The Note Trustee seeks answers from the Court to various issues concerning the interpretation and effect of the financial documentation of which the Notes form a part. The Issuer is a special purpose company incorporated in the Republic of Ireland where the Notes are listed. However, the Notes and the other contractual documents are governed by English law.
Overview
The Notes were issued pursuant to a trust deed dated 24 May 2007 (“the Trust Deed”). They are floating rate commercial mortgage backed securities (CMBS) and are due for redemption in 2017. They comprise a number of different classes and are designated (in descending order of seniority) Classes A - E. There are also two small additional classes X and V with priority as to interest, but which are not relevant to the issues that I have to decide. The total amount subscribed for the Notes was about £638 million. The senior, and by far the largest class of Notes by principal amount, were the Class A Notes, with a face value of about £435 million. The other classes each ranged between about £42 million and £60 million in principal amount.
The Notes were part of a financing structure relating to a total loan of some £1,172 million that was made to a borrower called Libra No.3 Limited (“the Borrower”). I shall refer to this loan as “the Whole Loan”. The original lender in respect of the Whole Loan was a company in the Credit Suisse group. The Whole Loan was divided into seven tranches, each of which is referred to in the documents as a “Loan”. The most senior tranche had a principal amount of some £638 million, and was referred to in the documents as “the Libra Loan” or “the A Loan”. I shall refer to it in the same way. The remaining six tranches amounted to a total principal amount of £534 million, were subordinated, and were designated (in descending order of priority) as the B0-1 Loan, the B0-2 Loan, the B1 Loan, the B2 Loan, the B3 Loan and the B4 Loan. I shall refer to these tranches collectively as “the Subordinated B Loan”.
At the time of issue of the Notes in May 2007, the Libra Loan had been transferred to another special purpose vehicle in the Credit Suisse group called Libra 2007 (NHP) Limited. The Libra Loan was subsequently acquired from