ECLI:NL:RBAMS:2023:2196

(1)(

1. b)of the Dutch Code of Civil Procedure, the Court also prohibited all parties from disclosing to third parties any information in the valuation report submitted by Madison. All interested parties waived their right to be heard. No hearing was scheduled. The Court set a date for judgment. By letter dated 28 March 2023, Madison requested the Court to postpone its judgment in light of a potential amendment to the (mechanics of the) Proposed Sale, as defined and further described in the application. All interested parties confirmed their agreement with this request by their counsel countersigning the letter. The Court subsequently postponed its judgment. By letter dated 4 April 2023, Madison submitted to the Court an amendment to its application, requesting the Court to order that the Shares be sold and transferred by the Pledgee to the Purchaser under the conditions as described in the Amended SPA, as defined in the amendment to the application. All interested parties - by their counsel countersigning this letter - confirmed that they did not wish to be heard on the amendment to the application and waived their right to be heard. Judgment was set for today. 2Facts – background 2.1. The Pledgor is the sole shareholder of the Company, which in turn is the holding company of a group of Dutch and foreign subsidiaries (the Frigoglass Group or the Group). The Frigoglass Group is a Greece-based manufacturer of commercial refrigerators (Ice-Cold Merchandisers, the ICM Operating Companies) as well as a manufacturer of frozen packaging (among which glass containers and complementary packaging products, the Glass Operating Companies). The Frigoglass Group includes Frigoglass Finance B.V. (Frigoglas Finance), a Dutch subsidiary of the Company. 2.2. The Pledgor is listed on the Athens Stock Exchange. On 6 March 2023, the shares in the Pledgor were held for 48.4% (indirectly) by Truad Verwaltungs A.G. (Truad) and for 51.6% by the public. Truad is a trustee of a trust established for the benefit of the present and future members of the family of the late [founder], who is the founder of the Frigoglass business. 2.3. On 12 February 2020, Frigoglass Finance issued EUR 260 million in aggregate principal amount of 6.875% Senior Secured Notes (the Senior Secured Notes). The Senior Secured Notes are guaranteed by the Pledgor, the Company and other subsidiaries of the Company. Interest must be paid semi-annually. The Senior Secured Notes mature on 12 February 2025. 2.4. On 12 February 2020, the Pledgor established a right of pledge over its shares in the Company (the Shares) in favour of the Pledgee to secure the repayment of the Senior Secured Notes (the 2020 Share Pledge). 2.5. The Group has been in financial distress for quite some time due to, among other things, the COVID-pandemic, a fire in a plant in Romania, and the war in Ukraine. Since June 2022, discussions to solve this situation have been ongoing between the ‘Ad Hoc Group’, the Pledgor, Truad and the Frigoglass Group. The Ad Hoc Group is a majority group of noteholders that comprise - at the date of the application - 100% of the holders of Bridge Notes, as defined below in para. 2.6, and 57.92% of the holders of the Senior Secured Notes, the SSN Holders. By letter, dated 8 March 2023, the Ad Hoc Group confirmed to the Pledgee that they reached an agreement on the terms of a consensual restructuring transaction. The material terms of the envisaged restructuring of the Frigoglass Group are set out in a lock-up agreement, dated 5 December 2022, between, amongst others, Frigoglass Finance, the Company and the Ad Hoc Group (the Lock-up Agreement). 2.6. In order to ensure Frigoglass Group has sufficient liquidity to pay its creditors and employees during the period between the execution of the Lock-up Agreement and the implementation of the proposed financial restructuring, the Company and Frigoglass Finance on 5 December 2022 issued bridge notes for an initial aggregate principal amount of EUR 35 million, with maturity date 11 January 2023. On 20 January 2023, a first tranche of additional bridge notes for an aggregate amount of EUR 10 million was issued, and on 3 February 2023 a second tranche of additional bridge notes, again for an aggregate amount of EUR 10 million (together: the Bridge Notes). The terms of the Bridge Notes are reflected in a trust deed dated 5 December 2022 between the Company and Frigoglass Finance as issuers, the Pledgor (among others) as original guarantor and Madison as trustee and security agent (the Trust Deed). 2.7. To secure the repayment of the Bridge Notes, the Pledgor established a share pledge in favour of the Pledgee on 5 December 2022 (the 2022 Share Pledge). Pursuant to article 3.4.3 of the 2022 Share Pledge, a change in priority (rangwisseling) occurred, pursuant to which the 2022 Share Pledge is ranked senior in priority to the 2020 Share Pledge. The parties to the 2022 Share Pledge are the same as the parties to the 2020 Share Pledge. As a result, the 2022 Share Pledge constitutes a first ranking right of pledge over the Shares and the 2020 Share Pledge constitutes a second ranking right of pledge over the Shares. Article 9 of the 2022 Share Pledge provides: “ 9. GOVERNING LAW AND JURISDICTION 9.1 Governing law This Deed and any non-contractual obligations arising out of or in connection with it are governed by and shall be interpreted in accordance with Dutch law. 9.2 Jurisdiction The courts of first instance (rechtbank)of Amsterdam, the Netherlands, have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed (including a dispute relating to the existence, validity or termination of this Deed or the consequences of its nullity or any non-contractual obligations arising out of or in connection with this Deed), without prejudice to the Security Agent's right (to the extent allowed by law) to submit any dispute to any other competent court in the Netherlands or in any other jurisdiction. (…)”. 2.8. The Bridge Noteholders initially agreed to weekly rolling extensions of the maturity date to allow time to make the necessary preparations for the financial restructuring. Now that such preparations have been made, the Bridge Noteholders are not willing to grant any further extension of the maturity date of the Bridge Notes. The Company, Frigoglass Finance and any other guarantor failed to redeem the outstanding amount of EUR 55 million plus accrued interest under the Bridge Notes on the (extended) maturity date of 28 February 2023. This payment default constitutes an event of default under the Trust Deed which in turn constitutes a default under the Secured Obligations (as defined in the 2022 Share Pledge). 2.9. On 8 March 2023, Madison as Bridge Notes Trustee sent an acceleration notice to the Company and Frigoglass Finance declaring all amounts in respect of the Bridge Notes to be due and payable. As neither the Company nor Frigoglass Finance or any guarantor repaid the outstanding amount under the Bridge Notes, the declared default constitutes a default (verzuim) within the meaning of Article 3:248 Dutch Civil Code. This in turn constitutes an Enforcement Event as defined in the 2022 Share Pledge. The Payment Default entitles the Pledgee to enforce its rights under the 2022 Share Pledge. 2.10. As part of the financial restructuring, Frigo Newco 1 Limited (New TopCo), incorporated in England and Wales and substantially owned by the SSN Holders, submitted a binding bid to the Pledgee to acquire the Shares, designating the Purchaser to enter into a share purchase agreement which sets out the terms of the transaction. 2.11. On 9 March 2023, the Pledgee, the Pledgor and the Company entered into a choice-of-court agreement (the NCC Agreement). Article 2 of this agreement provides: “2 Choice-of-court 2.1 Article 9.2 (Jurisdiction) of the Share Pledge is replaced as follows: (
2. a)All disputes and any proceedings, including any action or application regarding the enforcement of the Pledgee's rights such as an application for a deviating manner of enforcement of the rights of pledge over the Shares in accordance with section 3:251 paragraph 1 of the Dutch Civil Code, arising out of or in connection with this deed (including a dispute relating to non-contractual obligations arising out of or in connection with this deed or a dispute regarding the existence, validity or termination of this deed) (a “Dispute”) will be resolved by the Amsterdam District Court following proceedings in English before the Chamber for International Commercial Matters (Netherlands Commercial Court or NCC District Court), to the exclusion of the jurisdiction of any other courts. An action for interim measures, including protective measures, available under Dutch law may be brought in the NCC’s Court in summary proceedings in English. Any appeals against NCC or NCC’s Court in summary proceedings judgments will be submitted to the Amsterdam Court of Appeal’s Chamber for International Commercial Matters. (
3. b)Paragraph (
4. a)is for the benefit of the Pledgee only. As a result, the Pledgee shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction and in the other divisions of the courts of Amsterdam. To the extent allowed by law, the Pledgee may take concurrent proceedings in any number of jurisdictions. 2.2 This Agreement is an agreement within the meaning of section 30r paragraph 1 of the Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering) and section 1.3.1 paragraph (
5. d)of the NCC Rules. (…)” 2.12. On 4 April 2023, the Pledgee submitted to the Court an amendment to the sale purchase agreement referred to in paragraph 2.10 (the Amended SPA), which results in an amended proposed sale of the Shares and in conjunction therewith a corresponding acquisition of the claims under the Bridge Notes and EUR 150 million of the Senior Secured Notes (the Amended Proposed Sale). The Amended Proposed Sale set out in the Amended SPA consists of the following elements: the Purchaser acquires the Shares and in conjunction therewith the acquisition of the claims under the Bridge Notes and EUR 150 million of the Senior Secured Notes, the consideration for the Shares, the claims under the Bridge Notes and EUR 150 million of the Senior Secured Notes consists of:
6. i)a cash payment of EUR 1 in consideration for the transfer of the Shares;
7. ii)a cash payment in the sum of EUR 55 million plus fees and accrued interest in consideration for the transfer of the Bridge Notes (the cash is raised by the issuance of new superior senior notes by the Purchaser in an amount of EUR 75 million (the New Notes)); and iii) a non-cash consideration consisting of the issuance by the Purchaser to (or as directed
8. by)the Pledgee of new notes in an amount of EUR 150 million in consideration for the transfer of EUR 150 million Senior Secured Notes (the Reinstated Notes). 3Application 3.1. Madison, in its capacity as pledgee under the 2022 Share Pledge, requests the Court to order, by means of an immediately enforceable decision, that the Shares, by way of enforcement of the 2022 Share Pledge, will be sold and transferred by the Pledgee to the Purchaser under the conditions described in the Amended Proposed Sale, with an appropriate cost order under the law. 4Discussion Jurisdiction and applicable law 4.1. As Madison is seated in Hong Kong and the Company in the Netherlands, this is an international matter. In the NCC Agreement the Pledgee, the Pledgor and the Company agreed to have all disputes and any proceedings, including an application for a deviating manner of enforcement of the rights of pledge, resolved by the Amsterdam District Court following proceedings in English before the Chamber for International Commercial Matters (Netherlands Commercial Court or NCC District Court). This agreement replaced the choice-of-court clause in Article 9 of the 2022 Share Pledge. The Purchaser agreed to the same by countersigning the jurisdiction clause in the Cover Letter submitted by the Pledgee on 9 March 2023. 4.2. This means that the Amsterdam District Court has jurisdiction under Article 25

(1)of the Brussels Regulation (recast) (1215/2012), and the NCC Court in Summary Proceedings is the appropriate chamber to deal with the application. 4.3. The Company’s statutory seat is in the Netherlands and Dutch law therefore provides the rules on property law in respect of the Shares. Hence Dutch law will be applied. The parties to the 2022 Share Pledge (the Pledgor, the Company and the Pledgee) also explicitly chose Dutch law as the applicable law (article 9.1 of the 2022 Share Pledge). Enforcement of the pledge 4.4. Article 3:251 Dutch Civil Code (DCC) governs the enforcement of the pledge. Article 3:250 DCC provides that an enforcement sale is to be held in public, i.e. by way of a public auction. Article 3:251 DCC offers an alternative: Article 3:251 Alternative way to accomplish a sale by foreclosure - 1. […] the provisional relief judge of the District Court may, upon the request of the pledgee or pledgor, order that the pledged asset is sold by foreclosure in a different way than the one meant in the previous Article […]. 4.5. All interested parties waived their right to be heard on the application. 4.6. No one disputes that the Company is in default (verzuim) under the Trust Deed, which in turn constitutes a default under the Secured Obligations as defined in the 2022 Share Pledge. Therefore, Madison has the right to enforce the pledge. 4.7. When the right to enforcement arises, a pledgee has the right to decide if and when to proceed with enforcement. The Court on its own initiative has to examine whether, at the time the application was made, the requested alternative to a public auction (in this case: the Amended Proposed Sale) would realise the maximum possible value. This examination is done in the interest of the pledgor, other secured creditors and other creditors in general. The interest of the company whose shares are being sold do not prevail over the interest of the pledgee and creditors to realise the maximum possible value (reference is made to: Amsterdam District Court, 23 September 2009, ECLI:NL:RBAMS:2009:BJ8848). 4.8. The Amended Proposed Sale will have the following result:

1. i)the Bridge Notes in an aggregate principal amount of EUR 55 million will be repaid in full,
2. ii)the distribution of the EUR 150 million Reinstated Notes will discharge part of the EUR 260 million Senior Secured Notes, iii) the remaining undischarged part of the Senior Secured Notes (EUR 110 million, plus accrued interest approximately EUR 12.5 million) will be transferred to (or at the direction
3. of)New TopCo in exchange for 95% of the shares in New TopCo to be issued to the SSN Holders in proportion to the holdings of the Senior Secured Notes. The residual Senior Secured Notes Claim will be converted into equity immediately after the transfer of the Shares as contemplated by the Amended Proposed Sale, resulting in a reduction of the Group’s debt obligations in an amount of EUR 110 million (plus accrued interest of approximately EUR 12.5 million), and
4. iv)the Frigoglass Group will be provided with additional funding in an amount of approximately EUR 20 million (gross) as a result of the issuance of the New Notes. All these elements, together with the cash payment of EUR 1 in consideration for the transfer of the Shares, are to be considered as the value of the Amended Proposed Sale, the consideration offered for the Pledged Shares. 4.9. The Court finds, as Madison argues, that it is not likely that a public sale will result in a higher value than a private sale. 4.10. There are also no indications that any private sale, other than the Amended Proposed Sale, would realise more value. This is based on the following reasoning. 4.11. First, the market is aware of the financial difficulties of the Frigoglass Group due to its exposure in the media. The Frigoglass Group finds itself confronted with negative publicity about its future, which impacts its Senior Secured Notes prices and its credit rating. The Group's relationship with customers, suppliers, regulators and local financiers may also be at risk, which may become even more acute if these parties also become aware of the Event of Default under the Bridge Notes. Despite all this public information, no other potential buyer made itself known to the Pledgee, let alone - as Madison argues - that such a potential investor would be willing to make a better bid. 4.12. Second, the cash and non-cash consideration of EUR 205 million is based on the valuation report made by [the valuator] on 2 January 2023. The consideration for the Shares in the Amended Proposed Sale substantially exceeds the enterprise value of the Frigoglass Group in a liquidation and in a distressed sale scenario, as determined by [the valuator], and is in the range of the enterprise value in a non-distressed sale scenario. If the Group’s Russian subsidiary’s assets are not taken into account, in view of the international sanctions imposed following the Russian invasion in Ukraine, the consideration is even at the top end of the estimated enterprise value in a non-distressed sale scenario. 4.13. Third, the outstanding debt (EUR 315 million) far outweighs the value of the Group in a non-distressed sale scenario. This means that it can be validly assumed that the economic value of the Shares is negative. The negative economic value is reflected in the proposed payment of EUR 1 as cash consideration for the transfer of the Shares. 4.14. This leads to the conclusion that the Amended Proposed Sale will deliver maximum value for the Shares. 4.15. That means that the Court will grant the permission requested. Costs 4.16. Madison asks the Court to determine and award costs. Based on Article 289 Dutch Code of Civil Procedure, the Court can award costs. However, as these proceedings were necessitated by law (Article 3:251 DCC) and the permission requested is granted, the Court sees insufficient grounds for a cost award. 5Conclusion and order THE COURT IN SUMMARY PROCEEDINGS: 5.1. Permission is granted for the Shares to be sold and transferred by Madison to the Purchaser under the conditions described in the Amended SPA. 5.2. No costs are awarded. 5.3. This judgment is enforceable notwithstanding appeal. Done by R.A. Dudok van Heel, Judge, assisted by W.A. Visser, Clerk of the Court. Issued in public on 12 April 2023. APPROVED FOR DISTRIBUTION IN eNCC