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Results of Scheme of Arrangement Meeting 7 November 2006 Please be advised that the result of the vote at the Scheme Meeting was as follows: FOR: AGAINST: TOTAL: Please be advised that 157 prospective Scheme Creditors opted out of the Scheme; the Company estimates that the aggregate of the Scheme Claim Values of these persons would be just under Ј2.2m. Thank you to all those who participated in the voting process. With kind regards Scheme Meeting Held 20 OCTOBER 2006 Langbar International Limited - Scheme of Arrangement Meeting ("the scheme") Please be advised that the adjourned meeting for the scheme was held today and I can report that the resolutions tabled were unanimously passed at the meeting. Subject to adjustments and ratification by Victor Joffe QC acting as adjudicator, the vote taken was as follows: - Votes in Favour of the scheme: 99.75% holding 72,055,147 million shares. - Votes Against the scheme: 0.25% holding 52,328 thousand shares. Those share holders opting-out of the scheme totalled 157 holding just over 4 million shares. Full details will be published on the company website next week, prior to the court sanction hearing in early November. May I take this opportunity to thank all those who attended the meeting today and participated in the voting process. With kind regards 8 September 2006 Dear Sirs LANGBAR INTERNATIONAL LIMITED (A COMPANY INCORPORATED AND REGISTERED IN BERMUDA UNDER NUMBER EC33737) (THE “COMPANY” OR “LANGBAR”) PROPOSAL FOR A SCHEME OF ARRANGEMENT UNDER SECTION 425 OF THE COMPANIES ACT 1985 You have been sent this letter and its enclosures because you are believed to be a person eligible to be a Scheme Creditor (as defined in the Explanatory Statement to the Scheme) or you are the person best placed to pass them to a Scheme Creditor. If you are a current registered holder and/or beneficial owner of Common Shares in the Company or the registered holder and/or beneficial owner of Depositary Interests in Common Shares in the Company, in each case purchased on or before 12 October 2005, the directors of Langbar believe that you, along with the Company, have been the victims of a substantial fraud perpetrated by certain former directors and founder shareholders. As such, the current directors consider that you have or may have claims against these parties, their associates and also against the Company. You therefore are, or may be, eligible to be a Scheme Creditor of Langbar. If Scheme Creditors were to assert their claims against the Company and it was shown that the Company was liable, Langbar would have to be placed into liquidation or administration. On 16 December 2005, Christopher Wallis and I were appointed directors of Langbar. I was appointed Executive Chairman and Mr Wallis was appointed Finance Director. On 4 April 2006, The Right Honourable Sir Jeremy Hanley KCMG agreed to join the board as a non-executive director. He became Deputy Chairman of the Company on 11 May 2006. Since 16 December 2005 the board has been working to recover assets for Langbar. As part of this work, legal actions have been started in a number of jurisdictions against some former directors and founder shareholders and their associates to recover assets. These actions have met with some success. To date over I6 million has been recovered by the Company and I49.5 million are subject to freezing orders obtained by the Company. Some former directors and founder shareholders have raised legal arguments to the effect that the investors in the Company are the correct claimants against them and not the Company. Although Langbar does not accept these arguments, it has been advised that it should do what it can to forestall them. To help in this task and with the aim of bringing greater financial stability to the Company, the board considers that it would be appropriate to propose a scheme of arrangement under Section 425 of the Companies Act 1985 in relation to its affairs. It considers that the two principal objectives of the Company, namely maximising its assets and reducing the risks to its solvency, would be greatly assisted if the Scheme were to be approved by you, sanctioned by the Court and became effective. Please find enclosed with this letter a Scheme Document. It contains both the Scheme itself (which is the legal document containing the compromise and arrangement between the Company and its Scheme Creditors (as defined)) which is found towards the end of the Scheme Document and is accompanied by a statement explaining the effect of the Scheme. This is called the “Explanatory Statement” and is to be found towards the beginning of the Scheme Document. The Company is required to send this to you as a matter of law. You will also find at the final page of the Scheme Document a Notice of a meeting to approve the Scheme (the “Scheme Meeting”) to which you are invited to attend. This is referred to below. You will also find, with the Scheme Document, a Form of Proxy, a Special Form of Proxy for Nominees and Trustees, a Claim Form, a Non-Participation Form and an Admission Card. These are also referred to below. Please read the Scheme Document carefully. If the Scheme becomes effective, it will affect your rights not only against the Company but also against other persons, principally the former directors, founder shareholders and their associates and other parties who may be responsible for the loss to you and the Company. The principal effects of the Scheme are:
There are many advantages of the Scheme to Scheme Creditors. They are listed in the Explanatory Statement. In addition, there are specific disadvantages to Scheme Creditors of the Scheme and these are also listed in the Explanatory Statement. The directors are firmly of the view that the advantages to Scheme Creditors of the Scheme heavily outweigh the disadvantages and recommend that you vote for the Scheme at the Scheme Meeting which will be held on 6 October 2006 at 10.30am at The New Connaught Rooms, Great Queen Street, Covent Garden, London WC2B 5DA. If you are eligible to be a Scheme Creditor and wish to ‘opt out’ of the Scheme you should complete the Non-Participation Form and return it to the Company to be received not later than 48 hours before the time fixed for the Scheme Meeting. If you do this you will not be a Scheme Creditor for the purposes of the Scheme and will not be bound by its terms should it become effective. In order for the Scheme to be considered by the Court, it must be approved by a majority of Scheme Creditors in number representing three quarters in value of those present and voting in person or by proxy at the Scheme Meeting. This is a high hurdle. Please take the time to complete the appropriate Form of Proxy and the separate Claim Form (if applicable), even if you intend to attend the meeting yourself. The Special Form of Proxy for Nominees and Trustees has an integrated Claim Form. This form of proxy is to be completed by nominees or trustees of Common Shares and/or Depositary Interests who consider they have a Scheme Claim (as defined in the Scheme) and a Third Party Claim (as defined in the Scheme). If you are a registered holder voting as a nominee or trustee you should complete the Special Form of Proxy for Nominees and Trustees and its schedules. This will serve as your claim form. You must either return the Special Form of Proxy for Nominees and Trustees to Langbar as directed or your proxy should bring it with him to the Scheme Meeting. Beneficial owners who consider they have a Scheme Claim (as defined in the Scheme) and a Third Party Claim (as defined in the Scheme) should complete both the Form of Proxy and the separate Claim Form. There are notes accompanying the Forms of Proxy and Claim Form telling you how to complete these documents. The appropriate Form of Proxy and the separate Claim Form (if applicable) must be completed and returned if you do not attend the meeting as they will determine whether you are entitled to vote and the value of your vote. The Claim Form (if applicable) must be completed even if you attend the Scheme Meeting and you should either return it as requested below or bring it with you to the Scheme Meeting. Please return both the appropriate Form of Proxy and the separate Claim Form (if applicable) in the prepaid envelope. Returning a Form of Proxy or Special Form of Proxy for Nomineesand Trustees does not prevent you from attending the Scheme Meeting and voting in person. Please bring the enclosed Attendance Card with you to the Scheme Meeting as it will allow you entry to the meeting. If you are attending by proxy (or, if a company, by a corporate representative), please give the Attendance Card to your proxy or representative, so that they can bring it to the Scheme Meeting. If you are not the registered holder and/or beneficial owner of Common Shares and/or Depositary Interests please pass this letter and its enclosures urgently on to the beneficial owner or if not the beneficial owner the person from whom you take instructions in relation to the Common Shares and/or Depositary Interests with a request that he passes them on to the beneficial owner. If you require soft copies of this letter and its enclosures (which might be easier to forward or pass on) please contact info@langbar.com. Finally, the board is of the view that the Scheme is the only fair, realistic and positive way forward for Scheme Creditors. We urge you to vote for it. Yours faithfully David Buchler Langbar International Limited Langbar International Limited UK Office: Reg Office: Reg no: EC33737 |
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Report of Court Hearing - 4 July 2006 On 4 July 2006, the hearing of the application to convene the meeting of Langbar's Scheme Creditors (as defined in the proposed Scheme of Arrangement), adjourned from 16 June 2006, was resumed. Certain small shareholders represented by counsel and solicitors, appeared at the hearing of the application. Following submissions, the hearing was adjourned to enable the scheme to be amended to allow beneficial owners of the shares with Scheme Claims to vote on the scheme directly and be personally bound by it. Langbar will therefore be assembling a list of persons who have an interest in Langbar shares even though they do not appear on the relevant registers. This list will be assembled by contacting persons believed to have interests in Langbar shares directly, contacting those names which appear on Langbar's registers and advertising in appropriate newspapers in relevant countries. It is hoped to restore the court application at the end of this month and proceed with a revised Scheme of Arrangement. During the course of the hearing the judge (Mr Justice Lindsay) heard from one of the Langbar creditors who expressed his strong support for the proposed scheme. At the end of the hearing, the judge encouraged Langbar to come back to court with a revised scheme, commenting that the scheme had many advantages over the other courses of action open to the company. I firmly believe a scheme should be pursued and will do so as quickly as possible. I also intend to continue with the meeting on 25 July 2006 at 10.30am at the New Connaught Rooms, 61-65 Great Queen Street, Covent Garden, London WC2 5DA to afford shareholders the opportunity of being updated on the litigation and being able to ask questions on the process of the scheme and its mechanics. Hopefully this will help shareholders to express in person their views and to enable shareholders to hear from their directors and professional advisors the reasons for the scheme, the way forward for the company and what this would mean for shareholders. I hope this will be helpful and constructive for all. With kind regards 19 June 2006 In the High Court on 16 June 2006 Langbar applied for leave to convene a meeting on 25 July 2006 of certain creditors of Langbar referred to as ‘Scheme Creditors’. Scheme Creditors are principally investors who are holders of Langbar’s Common Shares or Depositary Instruments who have or may have claims against (1) Langbar and (2) certain persons formerly associated with Langbar such as certain founder shareholders and former directors. The purpose of the meeting is to vote on and approve a proposal for a scheme of arrangement under section 425 of the Companies Act 1985 (the “Scheme”) between Langbar and its Scheme Creditors. The proposed Scheme is important for the future direction of Langbar. The Court adjourned the hearing to 4 July 2006 to enable a letter concerning the proposed Scheme (the “Practice Statement Letter”) to be sent to Scheme Creditors and draft documents relating to the proposed Scheme to be posted on Langbar’s website. You will find the Practice Statement Letter and these draft documents under the section of this website entitled ‘Investor Relations’. Please read the Practice Statement Letter dated 19 June 2006 carefully. It gives a summary of what the Scheme entails and why it is being proposed. In particular, please read the section headed “THE ACTION YOU SHOULD NOW TAKE”. Revised Practise Statement Letter 04 August 2006 Dear Sir/Madam LANGBAR INTERNATIONAL LIMITED (A COMPANY INCORPORATED AND REGISTERED IN BERMUDA UNDER NUMBER EC33737 FORMERLY KNOWN AS CROWN CORPORATION LIMITED) (THE "COMPANY" OR “LANGBAR”) PROPOSAL FOR A SCHEME OF ARRANGEMENT UNDER SECTION 425 OF THE COMPANIES ACT 1985 INTRODUCTION Definitions of capitalised terms used in this letter can be found in the schedule to it. If you are a current holder of Common Shares or the current holder of Depositary Interests you will have received a letter from the Company dated 19 June 2006 in which the Company explained that it was proposing a scheme of arrangement and outlined the terms of the proposed Scheme and why it was being proposed. That letter also informed addressees that the Company had applied to the Court for permission to convene the necessary meeting of Scheme Creditors (as that term was then defined in the proposed Scheme) and that the Court hearing had been adjourned to 4 July 2006. If you are not a current holder of Common Shares or the current holder of Depositary Interests, this letter may be the first notice you will have received of the Company’s proposed scheme of arrangement. If you hold Common Shares or Depositary Interests as a nominee for another person or persons, please forward a copy of this letter to them immediately. (If you would like extra copies of this letter, please contact the Company using the details given below.) The Court hearing on 4 July 2006 was adjourned so that the proposed Scheme could be modified in response to certain representations made by certain potential Scheme Creditors. The directors of the Company (the "Directors") consider that these modifications improve the proposed Scheme. The principal modification is to the definition of the term "Scheme Creditor" which now extends not only to creditors who are current holders of Common Shares and/or Depositary Interests (referred to in the proposed Scheme and in this letter as "Registered Holders") but also to creditors who, although not Registered Holders, are in the reasonable opinion of the Company the beneficial owners of Common Shares and/or Depositary Interests (referred to in this letter as "Beneficial Holders"). As a Registered Holder and/or Beneficial Holder, the Directors believe that you, along with the Company, have been the victims of a substantial fraud perpetrated by certain former directors and founder shareholders of Langbar. As such, the current directors of the Company consider that you have or may have claims against these parties and their associates and also against the Company. You therefore are, or may be, a creditor of Langbar. As a result of the potential claims which the Company faces, there are risks to the solvency of the Company. If the Scheme, which is described below, is approved by those affected by it and becomes effective it will reduce these risks. Following the hearing on 4 July 2006 all Registered Holders were sent notices requiring them to disclose details of interests held in the Common Shares and Depository Interests including beneficial ownership. Notices were placed in the London edition of the Financial Times on 13 July 2006 and in the German edition of the Financial Times on 14 July 2006 asking beneficial owners to contact the Company. Contact details of the members of the Langbar Action Group have been received by the Company. By 28 July 2006 the list of potential Scheme Creditors had increased from 266 to approximately 1700. There was a further Court hearing on 28 July 2006 so that the Court could be updated on the amendments which the Company had made to the proposed Scheme and further representations could be made by certain potential Scheme Creditors. The Company is, by this letter, reissuing the 19 June 2006 letter, modified to take into account the changes made to the proposed Scheme. This letter is addressed to creditors of the Company who are Registered Holders and/or Beneficial Holders known to the Company. BACKGROUND On 16 December 2005, Christopher Wallis and I were appointed directors of Langbar. I was appointed Executive Chairman and Mr Wallis was appointed Finance Director. On 4 April 2006, The Right Honourable Sir Jeremy Hanley KCMG joined the board of the Company as a nonexecutive director. He became Deputy Chairman of the Company on 11 May 2006. Since 16 December 2005 the Directors have been working to recover assets for Langbar. As part of this work legal claims have been instituted by way of proceedings in a number of jurisdictions (including England) against some of the former directors and founder shareholders and their associates. The claims have already met with some success and to date a freezing order in the sum of €49.5 million has been obtained over the assets of Mr Mariusz Rybak, a former director. The Company has also made recoveries of approximately €6 million from Lambert Financial Investments Limited which have now been paid to the Company. Certain former directors and founder shareholders have raised legal arguments to the effect that you, the principal investors in the Company, are the correct claimants against them and not the Company. Although Langbar does not accept these arguments, to deny them any viability, and with the aim of bringing greater financial stability to the Company, the Directors consider that it would be appropriate to propose a scheme of arrangement under Section 425 of the Companies Act 1985 (the “Scheme”) with certain of its creditors, namely creditors who are either Registered Holders (that is to say, the current registered holders of Common Shares in the Company and the current registered holders of Depositary Interests in Common Shares in the Company) and/or Beneficial Holders (that is to say, current beneficial owners of Common Shares or Depositary Interests) (“Scheme Creditors”). It is considered that the Scheme would be an important first step in achieving two principal objectives: (i) defeating the legal argument asserted by the former directors and founder shareholders of the Company that the Company is not the proper claimant in the proceedings it has brought against them; and (ii) reducing the risk of the Company being forced into a formal insolvency process. A key feature of the proposed Scheme which helps the first objective is that it provides for the assignment to the Company of claims which Scheme Creditors might have against the former directors, founder shareholders and other persons involved with the Company prior to the discovery of the fraud. The Directors have considered alternatives to the assignment of claims such as inviting Scheme Creditors to join the proceedings through a representation order or group litigation order. Having considered these alternatives, the Directors consider an assignment of claims through the Scheme is in the best interests of all the Scheme Creditors for the following reasons:
A scheme of arrangement is a legally binding compromise or arrangement between a company and its members or creditors or any class of them. The Company is a “company” under the Companies Act 1985 for these purposes even though it is incorporated and registered in Bermuda. The Scheme will only affect your rights if you are a Scheme Creditor (as defined in the Scheme). The Scheme will become effective and binding on the Company and all its Scheme Creditors if:
If it becomes effective the Scheme will bind all Scheme Creditors even if they did not receive notice of the Scheme Meeting, did not vote or voted against the Scheme. However, as explained below, potential Scheme Creditors will have the opportunity to "opt out" of the Scheme before the Scheme Meeting. It is of great importance that the proceedings in relation to the Scheme are progressed with urgency. The argument that the Company is not the proper claimant in the claims it has brought against certain of its former directors and founder shareholders is due to be contested on 30 October 2006, or later during the course of that week. To ensure that this argument is rendered irrelevant the Scheme would need to be approved prior to this date. Time is, therefore, short. THE COURT HEARING Langbar originally applied to the High Court of Justice at the Royal Courts of Justice, Strand, London WC2A 2LL, United Kingdom, for permission to convene the necessary meeting of Scheme Creditors to consider and, if thought appropriate, approve the Scheme. A hearing was held on 16 June 2006 which was adjourned to 4 July 2006 to enable the letter of 19 June 2006 to be sent and then subsequently adjourned again until 28 July 2006. Prior to 28 July 2006, the Company modified the draft proposed Scheme to reflect certain concerns raised by certain members of the Langbar Action Group. The hearing has now been adjourned once again until 1 September 2006 (the "Adjourned Hearing") to allow this letter to be sent and to allow the Company to gather further information regarding the identity of the Beneficial Holders. You will receive formal notice of the meeting of Scheme Creditors after the Adjourned Hearing, if the Court accedes to the Company’s application. THE SCHEME The background to the Scheme is explained in the section of this letter captioned “Background”. The principal effects of the Scheme are:
MODIFICATIONS TO THE SCHEME The principal modification made to the draft proposed Scheme (since the Company’s 19 June 2006 letter to Registered Holders) is the modification to the definition of "Scheme Creditor" described above. Scheme Creditors are the persons who will be entitled to vote at the Scheme Meeting and who will, if the Scheme becomes effective, be bound by it. Persons who would otherwise become Scheme Creditors should also note that they will now be entitled, should they so wish, to "opt out" of the Scheme, by returning to the Company (prior to the Scheme Meeting) a Non Participation Form, which will be provided along with the other scheme documents. The Company has indicated in a letter to the Langbar Action Group its intention in certain circumstances to assign back to the relevant Scheme Creditor Assigned Claims which it does not pursue. Finally, those excluded from the Scheme have been extended to include Mr Stuart Pearson and Mr Philip Wood, following representations by certain potential Scheme Creditors. THE MEETING AND THE PROPOSED VOTING CLASS Langbar intends to propose calling a single class meeting of Scheme Creditors for the purposes of considering and, if thought fit, approving the Scheme. The rationale for this is that the Directors believe all Scheme Creditors have, or may have, claims of a similar type both against Third Parties and against Langbar and are therefore affected in a similar way by the terms of the Scheme. The Company believes that the rights of the Scheme Creditors are not so dissimilar that they are unable to consult together with a view to their common interest. If the rights of Scheme Creditors were to be so different, or would be affected so differently by a scheme, as to make it impossible for them to consult together with a view to their common interests, they would have to be divided into distinct classes and vote at separate class meetings. If you consider that the conclusion reached by the Company, namely that the rights of the Scheme Creditors are not so dissimilar that they are unable to consult together with a view to their common interest, is incorrect, you are invited to contact the Company as a matter of urgency to explain why you reach a different conclusion and you are entitled to attend Court at the Adjourned Hearing and to make submissions to the Court to support your conclusion. CONCLUSION It is the view of the Directors that it is appropriate to convene one meeting of Scheme Creditors to consider and, if thought appropriate, approve the Scheme. The application to Court will be made on that basis. THE ACTION YOU SHOULD NOW TAKE If any potential Scheme Creditor has concerns, having considered appropriate professional advice, on the proposed constitution of classes, they should write, fax or email Langbar, using the contact details below, as soon as possible and in any event 24 hours prior to the date of the Adjourned Hearing. Any concerns which creditors communicate in writing to us on this issue will be drawn to the Court’s attention at the Adjourned Hearing. Scheme Creditors also have the right to attend the Adjourned Hearing for the purpose of making representations and we will be pleased to provide you with further information about the Adjourned Hearing if requested. Please note however that the Court will not consider submissions or evidence which concern the “merits” or “fairness” of the Scheme at the Adjourned Hearing. The Court will be concerned, at the Adjourned Hearing, to ensure that the Scheme Creditors are placed into one or more than one class and to make directions for the convening and conduct of the Scheme Meeting (or Scheme Meetings if the Court finds that the Scheme Creditors comprise more than one class). The merits and fairness of the Scheme will be considered by the Court if and when it is asked to sanction the Scheme. The Company will only be able to seek the Court’s sanction if and when it has obtained the requisite majority of the Scheme Creditors’ votes at the Scheme Meeting. Copies of the draft Scheme Document can be downloaded from www.langbar.com from 4 August 2006 and can be obtained from the address detailed below. The Scheme Document consists of: the Scheme, a statement explaining the effects of the Scheme and a notice of the Scheme Meeting. Please note that if the Scheme is approved at the meeting of Scheme Creditors, it will be possible for Scheme Creditors to raise objections on the question of classes at the subsequent Court hearing to sanction the Scheme which it is anticipated will be held in early October 2006. However, were this to be case, the Court is likely to expect Scheme Creditors to show good reason why they did not object at an earlier stage. CONTACT DETAILS AND FURTHER INFORMATION By post: By email: info@langbar.com By fax: +44 (0) 20 7647 9911 If you are unable to access the website and would like a copy of the draft Scheme Documents sent to you by alternative means, or if you have any other queries, please contact us by one of the above means. Yours faithfully David Buchler Practise Statement Letter 19 June 2006 Dear Sir/Madam LANGBAR INTERNATIONAL LIMITED (A COMPANY INCORPORATED AND REGISTERED IN BERMUDA UNDER NUMBER EC33737 FORMERLY KNOWN AS CROWN CORPORATION LIMITED) (THE "COMPANY" OR “LANGBAR”) PROPOSAL FOR A SCHEME OF ARRANGEMENT UNDER SECTION 425 OF THE COMPANIES ACT 1985 INTRODUCTION As a current holder of Common Shares in the Company or the holder of Depositary Interests in Common Shares in the Company, the directors of Langbar believe that you, along with the Company, have been the victims of a substantial fraud perpetrated by certain former directors and founder shareholders of Langbar. As such, the current directors consider that you have or may have claims against these parties and their associates and also against the Company. You therefore are, or may be, a creditor of Langbar. As a result of the potential claims which the Company faces, it is, or is likely to become, insolvent unless the scheme of arrangement which is described below is approved by those affected by it and becomes effective. On 16 December 2005, Christopher Wallis and I were appointed directors of Langbar. I was appointed Executive Chairman and Mr Wallis was appointed Finance Director. On 4 April 2006, The Right Honourable Sir Jeremy Hanley KCMG agreed to join the board as a non-executive director and became Deputy Chairman of the Company on 11 May 2006. Since 16 December 2005 the Board has been working to recover assets for Langbar. As part of this work legal claims have been instituted by way of proceedings in a number of jurisdictions (including England) against some of the former directors and founder shareholders and their associates. The claims have already met with some success and to date a freezing order in the sum of €49.5 million has been obtained over the assets of Mr Mariusz Rybak, a former director. Certain former directors and founder shareholders have raised legal arguments to the effect that you, the principal investors in the Company, are the correct claimants against them and not the Company. Although Langbar does not accept these arguments, as an answer to the arguments and with the aim of bringing greater financial stability to the Company, the Board considers that it would be appropriate to propose a scheme of arrangement under Section 425 of the Companies Act 1985 (the “Scheme”) with certain of its creditors, namely the current holders of Common Shares in the Company and the current holder of Depositary Interests in Common Shares in the Company (“Scheme Creditors”). It is considered that the Scheme would be an important first step in achieving two principal objectives: (i) defeating the legal arguments asserted by the former directors and founder shareholders bringing Scheme Creditors’ own claims against them into the proceedings and (ii) returning Langbar to solvency. A key feature of the proposed Scheme which helps the first objective is that it provides for the assignment to the Company of claims which Scheme Creditors might have against the former directors, founder shareholders and other persons involved with the Company prior to the discovery of the fraud. The Board has considered alternatives to the assignment of claims such as inviting Scheme Creditors to join the proceedings through a representation order or group litigation order. Having considered these alternatives, the Board considers an assignment of claims through the Scheme is in the best interests of all the Scheme Creditors for reasons which include the following:
A scheme of arrangement is a legally binding compromise or arrangement between a company and its members or creditors or any class of them. The Company is a “company” under the Companies Act 1985 for these purposes even though it is incorporated and registered in Bermuda. The Scheme will only affect your rights if you are a Scheme Creditor (as defined in the Scheme). The Scheme will become effective and binding on the Company and all its Scheme Creditors if:
If it becomes effective the Scheme will bind all Scheme Creditors even if they did not receive notice of the Scheme Meeting, did not vote or voted against the Scheme. It is of great importance that the proceedings in relation to the Scheme are progressed with urgency. The key factor which dictates that the Scheme should be pursued urgently is that the argument to the effect that the principal investors in the Company are the correct claimants in the claims brought by the Company is due to be contested in an application issued by certain of the former directors and founder shareholders which is expected to be heard in October 2006. Time is, therefore, short. THE COURT HEARING Langbar has applied to the High Court of Justice at the Royal Courts of Justice, Strand, London WC2A 2LL, United Kingdom, for permission to convene the necessary meeting of Scheme Creditors on 25 July 2006 to consider and, if thought appropriate, approve the Scheme. A hearing was held on 16 June 2006 which was adjourned to 4 July 2006 (the “Adjourned Hearing”) to enable this letter to be sent. The date of the Adjourned Hearing will be confirmed on the Company’s website, www.langbar.com, but unless notice of cancellation is posted, you should assume that the Adjourned Hearing will proceed on 4 July 2006 at the Royal Courts of Justice. Formal notice of the meeting of Scheme Creditors, which the Company will invite the Court to convene to be held on 25 July 2006, will be sent to you after the 4 July 2006 hearing, if the Court accedes to the Company’s application. Following guidance given by Order of The High Court of Justice of England and Wales on 16 June 2006, I am writing to inform you of:-
THE SCHEME The background to the Scheme is explained in the section of this letter captioned “Introduction”. The definitions of the capitalised terms which appear below can be found in the draft Scheme Document which has been posted on the Company’s website. The principal effects of the Scheme are:
Scheme Creditors should note that the former directors and founder shareholders and their nominees are “Excluded Persons” under the Scheme and are therefore excluded from voting on it or benefiting under it. The Company has made all reasonable efforts to identify the nominees of the former directors and former shareholders and their associates. THE MEETING AND THE PROPOSED VOTING CLASS Langbar intends to propose calling a single class meeting of Scheme Creditors for the purposes of considering and, if thought fit, approving the Scheme. The rationale for this is that the Board believes all Scheme Creditors have, or may have, claims of a similar type both against Third Parties and against Langbar and are therefore affected in a similar way by the terms of the Scheme. The Company believes that the rights of the Scheme Creditors are not so dissimilar that they are unable to consult together with a view to their common interest. If the rights of Scheme Creditors were to be so different, or would be affected so differently by a scheme, as to make it impossible for them to consult together with a view to their common interests, they would have to be divided into distinct classes and vote at separate class meetings. If you consider that the conclusion reached by the Company, namely that the rights of the Scheme Creditors are not so dissimilar that they are unable to consult together with a view to their common interest, is incorrect, you are invited to contact the Company as a matter of urgency to explain why you reach a different conclusion and you are entitled to attend Court on 4 July 2006 and to make submissions to the Court to support your conclusion. CONCLUSION It is the view of the Board that it is appropriate to convene one meeting of Scheme Creditors to consider and, if thought appropriate, approve the Scheme. The application to Court will be made on that basis. THE ACTION YOU SHOULD NOW TAKE If any potential Scheme Creditor has concerns, having considered appropriate professional advice, on the proposed constitution of classes, they should write, fax or email Langbar, using the contact details below, as soon as possible and in any event 24 hours prior to the date of the Adjourned Hearing which will be notified on www.langbar.com. Any concerns which creditors communicate in writing to us on this issue will be drawn to the Court’s attention at the Adjourned Hearing. Scheme Creditors also have the right to attend the Adjourned Hearing for the purpose of making representations and we will be pleased to provide you with further information about the Adjourned Hearing if requested. Please note however that the Court will not consider submissions or evidence which concern the “merits” or “fairness” of the Scheme at the Adjourned Hearing. The Court will be concerned, at the Adjourned Hearing, to ensure that the Scheme Creditors are placed into one or more class and to make directions for the convening and conduct of the Scheme Meeting (or Scheme Meetings if the Court finds that the Scheme Creditors comprise more than one class). The merits and fairness of the Scheme will be considered by the Court if and when it is asked to sanction the Scheme. The Company will only be able to seek the Court’s sanction if and when it has obtained the requisite majority of the Scheme Creditors’ votes at the Scheme Meeting. A copy of the suite of draft Scheme Documents can be found at and downloaded from www.langbar.com from Monday 19 June 2006. These draft documents consist of:-
Please do not complete and return the draft Form of Proxy or draft Claim Form at this time. Final versions of these documents and the Scheme Document and Admission Card will be sent to you if the Court makes an order convening the meeting of Scheme Creditors on 4 July 2006 at the Adjourned Hearing. Please note that if the Scheme is approved at the meeting of Scheme Creditors, it will be possible for Scheme Creditors to raise objections on the question of classes at the subsequent Court hearing to sanction the Scheme which it is anticipated will be held in early August 2006. However, were this to be case, the Court is likely to expect Scheme Creditors to show good reason why they did not object at an earlier stage. CONTACT DETAILS AND FURTHER INFORMATION By post: Langbar International Limited Marked for the attention of Mr Christopher Wallis By email: info@langbar.com By fax: +44 (0) 20 7647 9911 Marked for the attention of Mr Christopher Wallis |
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