A complex international battle over a multi-billion pound property asset that houses the international headquarters of the Santander banking group may be nearing resolution, a judge has said, as he declined to issue a bankruptcy order against Glenn Maud.
Mr Justice Snowden, ruling on the bankruptcy petition more than 18 months after hearing it, found that the interests of Maud’s creditors – who alleged a total debt of more than €175m (£154m) – would not be served by making him bankrupt immediately.
However, the judge also refused to dismiss the petition against Maud – pursued at this point solely by Edgeworth Capital (Luxembourg) S.a.r.l., an investment company associated with and advised by Robert Tchenguiz – in what he described as a “complicated and highly unusual” case.
He said: “The bankruptcy petition is merely one aspect of a far wider set of proceedings in England and Spain which have at their heart the financing and a battle for the ownership of a group of Spanish and Dutch companies known as ‘the Marme Group’ that owns a very substantial office and real estate complex in Boadilla del Monte, Madrid.”
The complex, home to the international HQ of Banco de Santander, is, he said, “worth several billion euros”, is known locally as “the Financial City” and was referred to in court as the “Santander Asset”. It is let on a long lease to Santander.
The shareholding of the parent company of the Marme Group is registered in equal shares in the names of Maud and his business associate Derek Quinlan, but the judge said the companies in the group are “heavily indebted as a result of incurring the finance to acquire the Santander Asset” and have entered insolvency proceedings in Spain.
The Spanish court has approved a liquidation plan under which the group’s assets – including the Santander asset – would be sold to the highest bidder, however a number of legal challenges to that plan have delayed its implementation.
In addition, the judge said, recently a rival proposal has been put forward that would see the Marme Group companies exit liquidation by “paying or otherwise satisfying all of their creditors”.
Parties involved in the Spanish insolvency proceedings include: Maud; a number of investment companies he is allied with, including California-based private equity firm Global Asset Capital Europe LLC (GAC), an active acquirer of office buildings in Europe leased to large corporates, and London-based AGC Equity Partners (AGC); Aabar Block S.a.r.l., an investment company controlled by the Abu Dhabi sovereign wealth fund, which is one of the joint petitioners for Maud’s bankruptcy in the UK; and Edgeworth.
The judge said that the following alleged debts were claimed by creditors of Maud:
i) Aabar and Edgeworth: €63m
ii) GAC: €23m
iii) Navarro Ventures S.a.r.l. (beneficially owned by Maud’s estranged wife): €65m
iv) The Libyan Investment Authority (LIA): €26.4m
The judge said that while Aabar and Edgeworth originally cooperated with a view to acquiring the Santander Asset, and jointly presented the bankruptcy petition against Maud, “they have since fallen out in spectacular fashion”. That resulted in separate proceedings between Aabar and Edgeworth, and led to a situation where Edgeworth was now the “only voice” from the various creditors actually seeking an immediate bankruptcy order against Maud.
Giving judgment more than 18 months after he heard the petition in November 2016, he said: “it is, I recognise, exceptional for a bankruptcy petition to have been pending for as long as this one has been pending. But this is a wholly exceptional case.”
And he said: “I do not propose, at this stage, either to dismiss the petition or make an immediate bankruptcy order.”
Instead, he said that the matter should return to court on a yet-to-be-scheduled date for further argument on the “future conduct of this very unusual bankruptcy petition”.
In relation to the Santander Asset, he said there is “real competitive tension in Spain as regards the battle for ownership or control”, between Edgeworth on one side, and “AGC, GAC, Mr Maud and their allies” on the other, which has given rise to “at least some prospect” that either through the bid process under the liquidation plan, or pursuant to some alternative process, the matter could be resolved.
He said: “Whilst there is no certainty, there does now seem to be some prospect of an imminent endgame to the Spanish insolvency which might bring a benefit to Mr Maud and his creditors if he continues to be able to play a role in Spain.
“In contrast, there seems to be no real likelihood of any obvious, still less immediate, benefit to his creditors if a bankruptcy order is made now.”
He added that he had not been given any specific reason why a formal investigation of Maud’s past dealings needs to be undertaken immediately.
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