Ardagh Glass Finance plc - Irish Stock Exchange

which creditors have a right to be paid. As a general principle, in bankruptcy proceedings competing
claims have equal right to payment in relation to the size of the amount claimed from the debtor’s
assets. However, preferential or secured creditors have the benefit of payment before other creditors.
In case of enforcement outside bankruptcy, an enforcement process is initiated by the creditor
obtaining an enforcement order from the Swedish Enforcement Authority or the court. Upon obtaining
an enforcement order against a debtor, a creditor may apply to the Enforcement Authority for
enforcement of its claim. If agreed upon between a pledgor and a secured creditor and the secured
creditor or its agent is in physical possession of the security assets, the agent may under certain
circumstances enforce the pledge without the involvement of the Enforcement Authority or a court. A
provision granting the secured party or its agent such right of enforcement is typically included in any
pledge agreement between the pledgor and the secured party or its agent.
The Netherlands
Insolvency Proceedings
Certain of the Subsidiary Guarantors are incorporated under the laws of The Netherlands. Any
insolvency proceedings applicable to such Subsidiary Guarantors may be governed by Dutch insolvency
laws. There are three corporate insolvency regimes under Dutch law: (a) emergency measures
(noodregeling), which relate to exempt credit institutions and insurance companies under The
Netherlands Financial Supervision Act (Wet op het financieel toezicht); (b) moratorium of payment
(surseance van betaling), both of which are intended to facilitate the reorganization of a debtor’s debts
and enable the debtor to continue as a going concern; and (c) bankruptcy (faillissement), which is
primarily designed to liquidate and distribute the assets of a debtor to its creditors. In practice a
moratorium of payment nearly always results in the bankruptcy of the debtor.
Unlike Chapter 11 proceedings under U.S. bankruptcy law where both secured and unsecured
creditors are generally barred from seeking to recover on their claims, Dutch emergency measures and
moratorium of payment proceedings allow certain secured creditors (including the senior lenders as
secured creditors under the senior credit facilities) and preferential creditors to satisfy their claims by
proceeding against the assets that secure their claims or to which they have preferential rights.
Therefore, a recovery under Dutch law could involve a sale of the assets of the Dutch Subsidiary
Guarantors in a manner that does not reflect their respective going concern value. Consequently, Dutch
insolvency laws could preclude or inhibit a restructuring and could reduce any recovery obtainable in
an insolvency proceeding.
In connection with Dutch bankruptcy proceedings, the assets of a debtor are generally liquidated
and the proceeds distributed to the debtor’s creditors on the basis of the relative priority of the claims
of those creditors and, to the extent claims of certain creditors have equal priority, in proportion to the
amount of such claims. Certain parties, such as secured creditors (including senior lenders as secured
creditors under senior credit facilities), will benefit from special rights. For example, secured creditors
such as pledgees and mortgagees may enforce their rights separately from bankruptcy. Furthermore, the
enforcement and recognition of the security interest would be subject to: (a) a statutory stay of
execution of up to two months extendable by another period of up to two months imposed by court
order pursuant to Sections 63(a) and 241(a) of The Netherlands Bankruptcy Act (Faillissementswet);
(b) a receiver (curator) can force a secured party to foreclose its security interest within a reasonable
time (as determined by the receiver pursuant to Section 58(1) of The Netherlands Bankruptcy Act),
failing which the bankruptcy trustee will be entitled to sell the relevant rights or assets and distribute
the proceeds to the secured party; and (c) excess proceeds of enforcement must be returned to the
company’s bankruptcy trustee; they may not be offset against an unsecured claim of the pledgee against
the company. In addition, any claims may be limited depending on the date they become due and
payable. All unsecured, pre-bankruptcy claims are submitted to a receiver (curator) for verification, and
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