CORRAL PETROLEUM HOLDINGS AB (PUBL) - Preem

are reasonable grounds for believing that the transaction will benefit us. We cannot assure you, however, that theissuance of the Senior Secured Notes will not be challenged by a liquidator or that a court would support our analysis.Under English insolvency law, any interest accruing under or in respect of the Senior Secured Notes for anyperiod from the date of commencement of liquidation proceedings could be recovered by holders of the Senior SecuredNotes only from any surplus remaining after payment of all other debts proven in the liquidation.Swedish insolvency laws differ from U.S. insolvency laws and your rights as our creditor may not be as strong underSwedish insolvency laws, which, in the event of our insolvency, may result in your claims remaining unsatisfied.In any main insolvency proceedings initiated in Sweden against us, the insolvency laws of Sweden wouldnormally apply to us. Under Swedish law, there is no consolidation in bankruptcies of the assets and liabilities of a groupof companies. Each individual company would thus be treated separately by a bankruptcy administrator appointed by thelocal district court. The assets of our subsidiaries would first be used to satisfy the debts of each respective subsidiaryand only the surplus (if any) remaining of a subsidiary would benefit the creditors of its parent company. As a result,your ability to protect your interests as potential creditors of a parent of such subsidiary may not be as strong underSwedish law as it would be under U.S. law.Rules of recovery under Swedish law may protect other creditors to your disadvantage.Under Swedish law relating to recovery, it is possible that other creditors may claim that payments under theSenior Secured Notes should be voided as recoverable transactions. Under Swedish law, in the case of bankruptcy orcompany reorganization proceedings, payments under the Senior Secured Notes (of principal or interest or otherwise)that are made less than three months before the application for bankruptcy or company reorganization proceedings isfiled with the competent court may, in certain circumstances, be recovered if the payment is carried out:using unusual means of payment;prematurely; orin an amount that has caused a material deterioration of the debtor’s financial position.Payments that are deemed to be customary, having regard to the circumstances, are, however, permissible. Itshould be noted that this recovery provision also applies to any set-off if the creditor was not entitled to set-off in thedebtor’s bankruptcy.Under Swedish law relating to recovery, any security granted may be recovered if (i) it was not provided for atthe time the debt was created or if it was not transferred to the secured party without delay following the creation of suchdebt unless the security can nevertheless be considered ordinary having regard to the circumstances and (ii) it wastransferred less than three months before the application for bankruptcy or reorganization. Should the secured party beconsidered to be closely related to the grantor, the relevant time period is less than two years before the application forbankruptcy or reorganization, but in that case the security will be recovered unless it is shown that the grantor was not,and did not by that measure become, insolvent.A Swedish court could also determine that a recoverable transaction has taken place under the general provisionon recovery whereby a payment under the Senior Secured Notes could be revoked if an agreement, transaction or otheract, such as the issuance of the Senior Secured Notes is held to favor a creditor in an undue manner to the detriment ofanother creditor or to transfer property out of reach of the creditors or to increase the debt to the detriment of thecreditors, provided that:the debtor was insolvent at the time the agreement, transaction or other act was concluded or the debtorbecame insolvent as a result of the transaction, by itself or combined with other circumstances; andthe other party knew or should have known of the insolvency, as well as of the circumstances due to whichthe payment under the Senior Secured Notes favored a creditor in an undue manner.However, under Swedish law, if such an agreement, transaction or other act is concluded earlier than five yearsbefore the application for bankruptcy or company reorganization was filed, the payment under the Senior Secured Notescould be revoked only if the party to the agreement, transaction or other act was someone related to the bankrupt orreorganized party, such as a group company.Cypriot insolvency laws differ from U.S. insolvency laws and your rights against Moroncha Holdings may not be asstrong under Cypriot insolvency laws, which, in the event of Moroncha Holdings’ insolvency, may result in yourclaims remaining unsatisfied.Moroncha Holdings, our parent company, is a private company limited by shares, incorporated under the laws ofCyprus. Moroncha Holdings is in law a separate and distinct legal entity from its subsidiaries and its parent and is notliable for the debts incurred by a member of the group unless and to the extent it has secured such debts or if it has11