Ardagh Glass Finance plc - Irish Stock Exchange

include, amongst others, situations where the other party to an agreement or other arrangement is
deemed to be a closely related party to the debtor such as a subsidiary or parent company.
Limitations on Enforceability due to the Swedish Reorganization Act
The Reorganization Act (Sw. Lag om Företagsrekonstruktion) provides companies facing economic
difficulty with an opportunity to resolve these without being declared bankrupt. Corporate
reorganization proceedings shall, as a main rule, terminate within three months from commencement
but may under certain conditions be extended for up to one year.
An administrator is appointed by the court and supervises the day-to-day activities and safeguards
the interests of creditors. However, the debtor remains in full possession of the business except that,
for important decisions such as paying a debt that has fallen due prior to the order of reorganization,
granting security for a debt that arose prior to the order, undertaking new obligations or transferring,
pledging or granting rights in respect of assets of a substantial value for the business, the consent of the
administrator is required.
The making of an order under the Reorganization Act does not have the effect of terminating
contracts with the debtor and, during the reorganization procedure, the debtor’s business activities
continue in the normal way. However, the procedure includes a suspension of payments to creditors
and the debtor cannot pay a debt that fell due prior to the order without the consent of the
administrator and such consent may only be granted should there be exceptional reasons for doing so
and any petition for bankruptcy in respect of the debtor will be stayed. A moratorium also applies to
execution in respect of a claim or enforcement of security during corporate reorganization proceedings
unless the security assets are in the physical possession of the secured creditor or any agent acting on
behalf of such creditor.
The debtor may apply to the court requesting public composition proceedings (Sw. offentligt
ackord) which means that the amount of a creditor’s claim may be reduced. The proposal for a public
composition must meet certain requirements such as that a sufficient proportion of the creditors which
are allowed to vote, in respect of a sufficient proportion of the outstanding claims vote in favor of such
public composition. Creditors with set-off rights and secured creditors will not participate in the
composition unless they wholly or partly waive their set-off rights or priority rights. Should the security
not cover a secured creditor’s full claim, the remaining claim will, however, be part of a composition. A
creditors’ meeting is convened to vote on the proposed composition. The public composition is binding
for all known and unknown creditors that had a right to participate in the public composition
proceedings.
Enforcement Process
In the event of bankruptcy the court will appoint a receiver in bankruptcy who will work in the
interest of all creditors with the objective of selling the debtor’s assets and distribute the proceeds
among the creditors.
The purpose of bankruptcy proceedings is to wind up the company in such a way that the
company’s creditors receive as high a proportion of their claims as possible. The receiver in bankruptcy
is required to safeguard the assets and can decide to continue the business or to close it down,
depending on what is best for all creditors. In general, the receiver in bankruptcy is required to sell the
assets of the debtor as soon as possible and to distribute the proceeds. In the interim, the receiver will
take over the management and control of the company and the company’s directors and/or managing
director will no longer be entitled to represent the company or dispose of the company’s assets.
When distributing the proceeds, the receiver must follow the mandatory provisions of the Swedish
Rights of Priority Act (Sw. Förmånsrättslagen), as amended from time to time, that states the order in
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