The High Court has proposed orders that would allow two creditors on the committee overseeing the liquidation of GTLK Europe DAC and GTLK Capital Europe DAC to trade in the companies’ debt notes if sanctions are lifted and trading resumes. The proposal is conditional on compliance with an information control protocol, potentially amended after further submissions. The court did not make the final order at this hearing.
In a judgment delivered on 21 February 2025, Mr Justice Rory Mulcahy found that trading in the notes could potentially let committee members profit from the winding up, engaging section 668(9) of the Companies Act 2014. He also found that the same concern arose under the equitable rule against fiduciaries profiting from their position. The notes are liabilities of the companies, rather than company property, so the separate statutory restriction on purchasing company property did not apply.
The applicants, Trinity Investments DAC and Attestor ICAV, hold about $378 million in notes. They asked the court to confirm that trading would not breach their duties or, alternatively, to grant leave to trade subject to a proposed protocol. The other inspection committee members and the joint liquidators supported the application. Trading in the notes had been prohibited under sanctions imposed after Russia’s invasion of Ukraine. The liquidators were seeking to have the companies removed from the scope of those sanctions; any resumption of trading also depended on a US general licence and clearance by relevant clearing houses.
The proposed protocol would restrict information shared between the applicants’ committee representatives and their trading team. The judge considered that the protocol, together with a public “cleansing statement” disclosing relevant inside information, could remove any trading advantage arising from committee membership. But he said the court could not declare in advance that trading would comply with EU market abuse rules. The applicants would remain responsible for complying with those rules at all times.
The judge identified three matters for further consideration before the order is finalised: setting a definite date for the protocol to take effect; considering whether the information barrier should also prevent trading information passing back to committee representatives; and making the liquidators’ obligation to issue a cleansing statement express, either in the protocol or in the order.
The court retained the ability to address any breach of duty, including non-compliance with the protocol. The judge listed the matter for 28 February 2025 to hear submissions on the precise form of order.