Ardagh Glass Finance plc - Irish Stock Exchange

ascertain the center of main interests, which should correspond to the place where the company
conducts the administration of its interests on a regular basis and is therefore ascertainable by third
parties. The point at which this issue falls to be determined is at the time that the relevant insolvency
proceedings are opened.
Under Polish bankruptcy law, the liability of a Guarantor in respect of the Senior Notes may be
paid only after certain debts of the Guarantor that are entitled to priority under Polish law have been
satisfied. Such preferential debts include, among other things, money owed to the State Treasury of
Poland in respect of taxes or social security contributions, remuneration owed to employees and claims
of secured creditors. Also, Polish law does not require a bankruptcy administrator (zarzadca), court
supervisor (nadzorca sadowy) and/or a court receiver (syndyk) (unless otherwise specifically stated,
hereinafter, bankruptcy administrator shall include each of zarzadca, nadzorca sadowy and syndyk) to
give effect to intercreditor arrangements such as subordination agreements. Although the law does not
preclude creditors from attempting to enforce such rights in separate proceedings based on their
entitlements arising from respective contracts, such proceedings are conducted outside of and following
bankruptcy proceedings. Therefore, the claims of all unsecured creditors may be paid on a pari passu
basis in a bankruptcy proceeding.
Under Polish law, after a Subsidiary Guarantor has been declared bankrupt, a bankruptcy
administrator has a right to:
• declare certain legal act(s) of the Subsidiary Guarantor, including the Guarantees, ineffective
towards the bankruptcy estate if such legal act was executed within one year prior to filing of the
motion to declare the Subsidiary Guarantor bankrupt and to the extent that under such legal act
the Subsidiary Guarantor disposed of or encumbered its assets for no consideration or for a
consideration where the value of Guarantor’s performance was glaringly higher than the
consideration received by the Subsidiary Guarantor or reserved for a third party;
• declare certain security established by the Subsidiary Guarantor or the payment by the
Subsidiary Guarantor of a debt not yet due, ineffective towards the bankruptcy estate if the
security was established or the payment was made within two months prior to the filing of the
motion to declare the Subsidiary Guarantor bankrupt (and the holder of the respective security
may escape the above sanction if it proves that it did not know that there were grounds for
declaring the Subsidiary Guarantor’s bankruptcy); and
• declare certain legal act(s) (even if for consideration) ineffective towards the bankruptcy estate if
entered into within six months prior to the filing of the motion to declare the Subsidiary
Guarantor bankrupt and to the extent they were entered into with: (i) the Subsidiary
Guarantor’s shareholders, their representatives and/or relatives, or (ii) affiliated companies, their
shareholders, and/or representatives or relatives of such shareholders, and/or (iii) the Subsidiary
Guarantor’s subsidiary or holding companies.
The judge commissioner may, under a motion from the bankruptcy administrator, declare any
encumbrances established over the assets of the Subsidiary Guarantor (such as mortgages, pledges,
registered pledges, etc.) ineffective towards the bankruptcy estate, to the extent that the Subsidiary
Guarantor was not the personal (original) obligor with respect to the underlying debt and if the
encumbrance was established one year prior to the filing of the motion to declare the Subsidiary
Guarantor bankrupt and the Subsidiary Guarantor received no consideration or the consideration
received was glaringly low compared to the value of the encumbrance.
It is arguable whether Polish courts would have jurisdiction over a debtor’s property located
outside Poland. Such jurisdiction would not exist in respect of real estate or other property rights
located abroad. Furthermore, courts outside Poland might not recognize the Polish Bankruptcy Court’s
jurisdiction.
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