Ardagh Glass Finance plc - Irish Stock Exchange

person who appears to have use, control or possession of such property or the proceeds of the sale or
development thereof to deliver it or pay a sum in respect of it to the liquidator on such terms as the
High Court sees fit. The ability to use Section 139 to challenge the transfer of assets has been extended
to receivers and examiners.
Enforcement Process
We believe that in the case of the Guarantees given by the Irish Guarantors, these will be given in
good faith for the purposes of carrying on each of their businesses and that there were reasonable
grounds for believing that they would benefit each such Irish Guarantor. There can be no assurance,
however, that the provision of the Guarantees by the Irish Guarantors will not be challenged by a
liquidator or that a court would support this analysis.
Germany
Insolvency
A number of Subsidiary Guarantors are incorporated in Germany. Consequently, in the event of
an insolvency of any such Subsidiary Guarantor, insolvency proceedings may be initiated in Germany.
Such proceedings would then be governed by German law.
Under German law, insolvency proceedings can be initiated either by the debtor or by a creditor in
the event of over-indebtedness (Überschuldung) or illiquidity (Zahlungsunfähigkeit) of the debtor. The
debtor is over-indebted if its liabilities exceed the value of its assets (according to temporary legislation
being in force until end of 2013, the debtor is in any case not over-indebted if its continuation as a
going concern is likely). The debtor is illiquid if it is unable to pay its debts as and when they fall due.
In addition, the debtor can file for insolvency proceedings if it is imminently at risk to be unable to pay
its debts as and when they fall due (drohende Zahlungsunfähigkeit). The insolvency proceedings are
court controlled and the court opens the insolvency proceedings if certain formal requirements are met
and if there are sufficient assets to cover at least the costs of the proceedings. If insolvency proceedings
are open, the court appoints an insolvency administrator who has full power to dispose of the debtor’s
assets, whereas the debtor is no longer entitled to dispose of its assets.
All creditors, whether secured or unsecured, who wish to assert claims against the debtor need to
participate in the insolvency proceedings. Any individual enforcement action brought against the debtor
by any of its creditors is subject to an automatic stay once insolvency proceedings have been opened.
Secured creditors are generally not entitled to enforce their security interests outside the insolvency
proceedings. However, secured creditors have certain preferential rights. The enforcement proceeds
minus certain contributory charges for (i) assessing the value of the secured assets and (ii) realizing the
secured assets are paid to the creditor holding a security interest in the relevant collateral up to an
amount equal to its secured claims. Remaining amounts are distributed among the unsecured creditors.
If the German Subsidiary Guarantors grant security to other creditors over their assets, such security
may result in a preferred treatment of creditors secured by such security. The proceeds resulting from
such collateral may not be sufficient to satisfy the holders of the Senior Notes under the Guarantees
granted by the German Subsidiary Guarantors after such secured creditors have been satisfied. A
different distribution of enforcement proceeds can be proposed in an insolvency plan (Insolvenzplan)
that can be submitted by the debtor or the insolvency administrator and requires the consent of the
debtor as well as the consent of each class of creditors in accordance with specific majority rules.
Limitation on Enforcement
Certain Subsidiary Guarantors are incorporated or established in Germany in the form of either
a GmbH (Limited Liability Company) or a GmbH & Co. KG (Limited Partnership with a Limited
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