Nortel Networks UK Ltd, Re

Nortel Networks UK Limited (“NNUK”) and the other Nortel companies listed above (together “the EMEA Companies”) are incorporated in a variety of countries in Europe, the Middle East and Africa. The EMEA Companies formed part of the worldwide Nortel Group which operated a networking solutions and telecommunications business across multiple jurisdictions based on the development, licensing and maintenance of intellectual property.

On 14 January 2009, the (Canadian) parent company of the Nortel Group and certain of the Canadian Nortel companies (together “the Canadian Debtors”) sought insolvency protection under the Canadian Companies’ Creditors Arrangement Act. On the same day, the Nortel Group companies which were registered in the United States (“the US Debtors”) filed for bankruptcy protection under Chapter 11 of the US Bankruptcy Code. The EMEA Companies were also all placed into administration in England by order of Mr. Justice Blackburne on the same day, the Judge being satisfied that the centre of main interests (as defined in the EC Regulation on Insolvency Proceedings (1346/2000) (“the EC Regulation”)) of each of the EMEA Companies was in the United Kingdom. The joint administrators are partners in Ernst & Young LLP (“the Administrators”).

On 23 July 2015 I made a number of orders in relation to the EMEA Companies as follows (“the Orders”):

an order pursuant to paragraph 65(3) of Schedule B1 of the Insolvency Act 1986 (“the Act”) that the Administrators of NNUK be at liberty to make such distributions in accordance with Chapter 10 of Part 2 of the Insolvency Rules 1986 (“the Rules”) to its unsecured non-preferential creditors as the Administrators consider appropriate;

an order pursuant to Rule 2.97(2) that the Administrators of NNUK be at liberty to declare dividends notwithstanding that there might be pending applications to the court to reverse or vary a decision of the Administrators on a proof, on the basis that full provision be made for such disputed proofs;

an order that the Administrators of the EMEA Companies apart from NNUK and Nortel Networks S.A. (“NNSA”) be at liberty to promulgate company voluntary arrangements under the Act in substantially the terms set out in evidence filed by the Administrators; and

an order that the Administrators of NNSA be at liberty to promulgate a company voluntary arrangement under the Act in respect of NNSA providing for a claims determination mechanism and such other terms as they might think appropriate.

I now give the reasons for my decision to make those Orders.

After filing for insolvency protection in January 2009, the companies in the Nortel Group continued to work together in an effort to co-ordinate a global reorganization. When that proved impossible, it was decided to attempt a global sale of the businesses and assets of the Group. To facilitate that sale, an Interim Funding and Settlement Agreement (“the IFSA”) was entered into on 9 June 2009 with the approval of the courts in Canada, the US and the UK. The IFSA provided that the net proceeds from the global sale would be held in escrow pending agreement or court determination as to how the proceeds should be allocated amongst the parties to the agreement who included the Canadian Debtors, the US Debtors and the EMEA Companies.

Pursuant to the IFSA, various business lines and associated assets were sold for approximately US$3.285 billion during the course of 2009 and 2010 and the residual intellectual property rights (being patents, patent applications and related rights) were subsequently sold for US$4.5 billion. The net sale proceeds, totaling approximately US$7.3 billion, were paid into escrow bank accounts in New York (“the Lockbox”) in accordance with the terms of the IFSA.

Following extensive negotiations and three formal mediation processes, all of which failed, the task of determining how the monies in the Lockbox should be allocated was, by agreement of the parties to the IFSA, given to the courts in the US and Canada. An allocation protocol was approved by both courts requiring a joint trial in the Ontario Superior Court of Justice (Commercial List) and the U.S. Bankruptcy Court for the District of Delaware.

Following a 21-day trial, judgments were handed down on 12 May 2015 in Delaware by Judge Gross and in Ontario by Mr. Justice Newbould. The decisions were subject to motions seeking reconsideration and further judgments were given on 6 July 2015. The conclusion reached by the Judges was summarized by Mr. Justice Newbould in paragraph 258 of his judgment of 12 May 2015, Re Nortel Networks Corporation[2015] ONSC 2987. That paragraph was slightly modified by the judgment of 6 July 2015, and the reference to a “Debtor Estate” was clarified to be a reference to an individual debtor (i.e. company or other legal entity) rather than the Canadian Debtors, the US Debtors or the EMEA Companies as groups. As modified, paragraph 258 of the first judgment was in the following terms:

In paragraph 253 of his judgment of 12 May 2015, Mr. Justice Newbould also set out his understanding of the claims position in the various insolvencies:

The Administrators subsequently wrote to the US and Canadian Courts, clarifying the position in relation to the EMEA Companies, and notifying them that I had been nominated by the Chancellor of the High Court to act as supervisory judge in relation to the administrations of the EMEA Companies. In his subsequent judgment of 6 July 2015, Mr. Justice Newbould said,

The reference to an informal claims process was to a process sanctioned by Mr. Registrar Nicholls on 18 May 2010 under which the Administrators of the EMEA Companies (other than NNSA) were authorised to request details of trade creditor claims and seek to agree them on an informal basis notwithstanding that they did not then propose to make a distribution to any creditors.

As might be expected, the Orders made by the US and Canadian Courts have been the subject of appeals filed by a number of the interested parties. I do not have any information as to the mechanism or likely timescale for resolution of those appeals.

The Application made by the Administrators has been prompted by their assessment that they must commence a proof, or other claims determination, process as soon as possible in relation to each of the EMEA Companies in order to protect the main asset in their estates - the potential recoveries from the Lockbox. Additionally, the Administrators wish to ensure that, once received, the monies from the Lockbox can be distributed amongst the creditors of the EMEA Companies as quickly and efficiently as possible.

That appears to me to be an entirely sensible view for the Administrators to take. It is plain that the Judges in the US and Canada wish to see that claims against the EMEA Companies are formally lodged, adjudicated upon by the Administrators and, so far as possible, any disputes determined so that the EMEA Companies catch up with the position in relation to the US Debtors and the Canadian Debtors. That will enable an allocation and distribution from the Lockbox to take place to all of the Debtor Estates. If the appeals against Judge Gross’ and Mr. Justice Newbould’s orders are dismissed, the Judges will plainly expect the distribution process to proceed expeditiously in accordance with their orders. Even if the appeals as to the basis of allocation are allowed, and the orders made by Judge Gross and Mr. Justice Newbould are varied, it still seems highly likely that substantial monies will be due to the EMEA Companies and a claims determination and distribution process will be required to facilitate a distribution to their creditors. There thus seems no good reason to defer the commencement of such a process to await the outcome of the appeals.

There will, however, have to be some differences between the proposed procedures for inviting and determining claims and for making distributions to creditors in relation to (i) NNUK, (ii) the other EMEA Companies apart from NNSA, and (iii) NNSA. These differences are essentially due to two factors. The first is that in relation to the EMEA Companies other than NNUK, various statements were made by the Administrators early in the administrations as to the intended treatment of local creditors so as to alleviate any pressure for local insolvency proceedings to be commenced. The Administrators have referred to these statements as “assurances” and have indicated that they wish to honour them in relation to all of the EMEA Companies except NNUK and NNSA. This will require a departure from the procedure for pari passu distribution under the UK insolvency legislation. The second factor is that it was necessary to open local insolvency proceedings in relation to NNSA in France. Accordingly, whilst it is not appropriate to implement the assurances to creditors who are able to participate in local proceedings in relation to NNSA, there are other issues arising from the co-ordination of the two sets of insolvency proceedings.

A proof of debt process and a distribution is not an automatic feature of every administration in England. Indeed, such a process was not possible in relation to administrations before the changes introduced by the Enterprise Act 2002. In the case of the EMEA Companies, the relevant statutory provisions are those in existence at the time at which they went into administration on 14 January 2009, and the references hereafter are to those provisions.

The process for proof of debts is contained in Chapter 10 of the Rules and, by Rule 2.68, is only applicable where the administrator makes or proposes to make a distribution to a class of creditors, and gives notice of his intention to creditors in accordance with Rule 2.95.

An administrator does not, however, have a free-standing discretion to decide to make a distribution to unsecured creditors. That power is given by paragraph 65 of Schedule B1 to the Act that provides as follows:

There have been relatively few cases which have considered the exercise by the court of its discretion to grant permission under paragraph 65(3) of Schedule B1. In Re GHE Realisations Ltd[2006] 1 WLR 278 at [5] to [11] Mr. Justice Rimer considered that the creditors’ interests as a whole should govern the exercise of the discretion, and that the court should consider whether the payment of a dividend is consistent with the functions and duties of the administrator and any proposals made by him.

In Re MG Rover Belux SA/NV[2007] BCC 446 at [7] HHJ Norris QC referred to Re GHE Realisations and suggested the following considerations might be taken into account:

These two cases were also considered by Mr. Justice David Richards in Re MF Global Overseas Ltd (unreported, 5 June 2013).

Applying these principles, it seems to me that it is plainly appropriate for permission to be granted in the case of NNUK:

it is obviously in the interests of creditors as a whole that NNUK should receive and distribute its share of the Lockbox monies;

it is necessary for the reasons outlined above to put in place a claims determination mechanism for NNUK so that it can be allocated and receive its fair share of the monies in the Lockbox;

NNUK has no secured creditors and its preferential creditors have already been paid in full;

the Administrators’ proposals for NNUK in February 2009 did not, in terms, refer to the possibility of a distribution to unsecured creditors by the Administrators themselves, but referred instead to the possibility of payments being made through a company voluntary arrangement, a scheme of arrangement or a creditors’ voluntary liquidation. However, it seems to me that nothing said by the Administrators excluded, or should be taken to preclude, the more obvious course of a distribution by the Administrators themselves if that were to be most convenient and cost-effective in the interest of creditors as a whole;

there is already a (very modest) amount which is available to the Administrators to pay a first dividend but, in any event, the expectation is that once NNUK receives what it is entitled to from the Lockbox, the Administrators will have a substantial amount available for distribution to NNUK’s creditors;

it will be relatively quick and inexpensive for the Administrators to give notice under Rule 2.95 of their proposal to make a distribution to creditors, thereby triggering the application of Chapter 10 of Part 2 of the Rules and the proof process contained within it; and

it is unnecessary, and would be disproportionate in terms of the additional costs which would be incurred, for NNUK to have to go into liquidation to achieve substantially the same result.

It is a requirement of Rule 2.95(4) that the notice that must be sent to trigger the proof of debt process in an administration must specify a last date for proving and state that it is the administrator’s intention to make a distribution within two months from that date. It is implicit that this intention must be genuinely held, and that is buttressed by the provisions of Rule 2.97(1) that the administrator must proceed to declare the dividend within the specified period.

In the case of NNUK it is, of course, unlikely in the extreme that any substantial proceeds from the Lockbox will be available for distribution in the next few months. However it is equally undesirable for a date for proving to be given which is a very long way off, since that would not provide an incentive for creditors to put in their claims and hence would not correspond with the plain desire of the Administrators and the US and Canadian courts that the UK claims process should “move along”.

None of the counsel appearing, nor I, could see any means by which to modify the requirements of Rule 2.95(4) in order more closely to reflect the rather unique requirements of NNUK’s situation. In the end the solution proposed, which I agreed should be followed, was for the notice to specify a date for proving of 31 October 2015 on the basis that the Administrators will (subject to reserving for disputed proofs) make a very modest interim distribution from the funds currently to hand within two months from that date.

The date of 31 October 2015 by which creditors are required to prove their claims was selected on the basis that the notice would be given by first class post to known creditors and widely advertised in the UK and abroad by 7 August 2015. I received further evidence from the Administrators’ solicitors of the state of their databases and of communications with creditors during the course of the administration. This satisfied me that the Administrators have accurate details for the overwhelming majority of NNUK’s creditors and that the proposals for advertising will be likely to bring the notice under Rule 2.95 to the attention of other persons who might claim to be creditors. I was also satisfied that, especially having regard to the informal process undertaken in 2010, that creditors so notified would have a reasonable period (12 weeks) to prepare and submit their claims. In any event, a creditor who did not submit their claim by that date might be excluded from the first interim distribution, but would be entitled to receive a catch-up dividend and participate in subsequent distributions if and when their proof had been subsequently lodged and accepted.

The requirement under Rule 2.97(1) for the intended distribution to be made within two months is subject to Rule 2.97(2) which provides that:

It is implicit in Rule 2.97(2) (and was subsequently made explicit by an amendment to the Rules in 2010) that the permission of the court should only be given on terms that provision is made for any disputed proofs so that a pari passu distribution can ultimately be made and creditors are not prejudiced. The Administrators have requested, and I accept, that they should have permission, on an ongoing basis, to declare interim dividends notwithstanding that there are pending applications to the court to reverse or vary a decision or decisions of theirs on a proof, provided that the Administrators make full provision in respect of all such disputed claims. If the Administrators are unable to agree the maximum value of a creditor’s claim, or if there is any other valid reason for them to do so, the Administrators will have to seek further directions from the court before declaring a dividend.

As indicated above, all of the EMEA Companies other than NNUK were incorporated elsewhere in the EU and had establishments in the Member States in which they were incorporated.

Under Articles 3(2) and 27 of the EC Regulation, secondary insolvency proceedings may be opened in a Member State other than the state of opening of main proceedings provided that the debtor in question has an establishment there. However, the effects of such secondary proceedings shall be restricted to the assets of the debtor situated in the territory of that other Member State. The result is that assets of the debtor situated in the Member State in which secondary proceedings are opened will be distributed according to local laws, including local priority and distribution rules, which vary from Member State to Member State.

In the case of the EMEA Companies other than NNUK, at the time of the opening of main insolvency proceedings by the appointment of the Administrators in England, it was thought possible that creditors in other EU Member States might seek to open secondary proceedings so as to take advantage of such local priority and distribution rules as regards local assets. The Administrators considered that it would be in the interests of the EMEA Companies’ creditors as a whole to avoid such secondary proceedings being opened because such proceedings would have been likely to disrupt the EMEA Companies’ participation in the coordinated global re-organisation or sale, thereby reducing the price that might be obtained. It was also feared that the opening of secondary proceedings might result in increased costs, multiplied formalities and delay.

In order to reduce the risk of the opening of secondary proceedings, on their appointment the Administrators obtained directions from Mr. Justice Blackburne in relation to each of the EMEA Companies other than NNUK. Those directions were as follows,

make such payments to the employees of the company as they would receive from the assets of the company if secondary proceedings were to be commenced …under Article 27 of the EC Regulation;

make such payments from the assets of the company to those creditors whose claims against the company would be preferential under [local law] if secondary proceedings were to be commenced .. under Article 27 of the EC Regulation, as they would receive in such secondary proceedings; and

make payment in respect of pre-administration liabilities”

Paragraph 66 of Schedule B1 to the Act provides that:

In giving his directions, Mr. Justice Blackburne was following the approach which had already been taken in similar pan-European insolvencies including, for example, Re MG Rover España SA[2006] BCC 599 and Re Collins & Aikman Europe SA[2006] BCC 861. In those cases, the view had been expressed that provided that administrators thought it likely to assist in achieving the broader purpose of an administration, paragraph 66 of Schedule B1 could be invoked to empower them to make payments to employees under the national laws of EU Member States over and above the entitlement of those employees under English law, so reducing the pressure from employees to open secondary proceedings. In Re Collins & Aikman Europe SA Mr. Justice Lindsay had also indicated that provided that administrators considered the giving of assurances likely to assist in achieving the purposes of the administrations at the time such assurances were given, that would normally suffice to enable the administrators to make subsequent payments to give effect to the assurances: see paragraphs 30-35.

Having obtained those directions, the Introduction to the Administrators’ Statements of Proposals circulated in February 2009 in respect of the EMEA Companies contained a statement to the following effect,

Notwithstanding those observations, secondary proceedings were in fact opened at the behest of the Administrators in France in relation to NNSA. The Administrators considered that it was in the best interests of that company’s creditors to do so, because NNSA was unable to effect the necessary redundancies in France, or carry out a major part of its required restructuring programme, without entering into a French insolvency process. NNSA’s secondary proceedings were opened in France on 28 May 2009 by the French Commercial Court and the business, property and affairs of NNSA situated in France have, since that date, been under the control of the French Liquidator. Otherwise, no secondary proceedings have been opened in relation to any of the EMEA Companies.

As regards the EMEA Companies other than NNUK and NNSA, the Administrators now consider that it is appropriate for them to follow the course outlined in their Statement of Proposals as regards the payment of local creditors. This will ensure, so far as possible, that local creditors are not prejudiced as a result of not having sought the opening of secondary proceedings.

There is, however, a difficulty. The powers given to the Administrators under paragraph 66 do not extend to conducting a process under which all potential claimants can be called upon to make their claims and for the adjudication of such claims. Moreover, if the Administrators were simply to give notice under Rule 2.95 so as to trigger the statutory scheme for the proof of debts in Chapter 10 of Part 2 of the Rules, this would also activate a number of mandatory provisions of the legislation which would or might be inconsistent with the making of payments to creditors under local laws. Such provisions would include,

the payment of preferential creditors (as defined by English law) in advance of the non-preferential creditors (Rule 2.69 and paragraph 65(2) of Schedule B1);

the payment of non-preferential creditors (as defined by English law) pari passu (Rule 2.69);

the application of English insolvency set-off (Rule 2.85);

the requirement to convert foreign currency claims into sterling at the official rate prevailing on 14 January 2009 (Rule 2.86);

the payment of interest (Rule 2.88); and

the application of Rules relating to the declaration and payment of dividends (Rules 2.97 to 2.105).

It was very much for these reasons that the Administrators’ Statement of Proposals envisaged the promulgation of a company voluntary arrangement under the Act (a “CVA”) or a scheme of arrangement under the Companies Act 2006. Both those procedures require approval by creditors in accordance with the relevant statute, and if so approved (and in the case of a scheme of arrangement, sanctioned by the court) will have the effect of modifying the statutory scheme that would otherwise be applicable and creditors’ rights under it.

The evidence of Mr. Bloom on behalf of the Administrators indicated that the Administrators intend to pursue the CVA route. Whilst the process of formulating the CVAs may take some time and effort, the present intention is for the CVAs in relation to the EMEA Companies other than NNUK and NNSA to include the following features,

a mechanism under which all creditors must submit their claims for assessment and determination by the Administrators. It is likely that the process will be based on the process set out in Chapter 10 of Part 2 of the Rules (with appropriate adjustments) and may also include a fixed date by which all proofs must be submitted (i.e. a “bar date”);

a process pursuant to which creditors can appeal the decision of the Administrators in respect of their claims;

a timetable for distribution of an interim dividend to creditors or specifying the circumstances in which a distribution will become payable;

a process to determine which of the assets owned by the relevant EMEA Company at the time when secondary insolvency proceedings might otherwise have been opened under the EC Regulation in the Member State in which the company had its establishment were situated in that territory (“Secondary Proceedings assets”), and which were situated outside that territory (“Main Proceedings assets”); and

a distribution mechanism under which Main Proceedings assets will be distributed in accordance with English law and Secondary Proceedings assets will be distributed in accordance with the local laws of the Member State in which the company had its establishment.

The promulgation of a CVA for the EMEA Companies other than NNUK will give the creditors of the relevant EMEA Company the opportunity to vote upon the proposals, and if the CVA is approved by the necessary majority of creditors, it will become binding on all creditors who would have been entitled to vote at the requisite meetings: see section 4A of the Act. Any creditors who consider that their interests are unfairly prejudiced by the CVA can apply for it to be revoked, suspended or revised and resubmitted to creditors: see section 6 of the Act. In this way, creditors who might consider themselves to be disadvantaged by the proposals to modify the application of the Act and Rules to accommodate the assurances given by the Administrators will have an opportunity, if they so wish, to vote against and challenge such proposals. Conversely, if the proposals are rejected, the Administrators will have the fall-back of implementing the statutory scheme in administration or liquidation and applying for further directions under paragraph 63 of Schedule B1. In such event, any individual creditors who wish to contend that the assurances should be given effect by some other route will have the option of applying to the court for an order to such effect, possibly under paragraph 74 of Schedule B1. Either way, it seems to me that the promulgation of CVAs along the lines proposed by the Administrators is an entirely appropriate course for them to take to initiate a process for the submission and determination of claims against the EMEA Companies in question.

As a final point in relation to the appeal process referred to in paragraph 40(ii) above, the Administrators indicated to me that they were contemplating that the CVAs should provide that any challenge to the admission of claims above a specified amount (possibly £100,000 or its equivalent) will be required to follow a process modelled on Rule 2.78, requiring an application to the court for determination of the dispute, but that disputes on smaller claims should be dealt with by way of a binding arbitration or expert determination process rather than by the court. That possibility was not referred to by Mr. Justice Newbould in paragraph 55 of his judgment of 6 July 2015 (above), but it should be noted that his remarks were made in the context of an argument that there might be “claims inflation” in the insolvencies of the EMEA Companies. Specifically, concerns were expressed by other parties in the US and Canadian insolvencies in relation to the determination of the claim of the UK Pension Claimants against NNUK, which is anticipated to be very sizeable. As presently advised, it seems to me unlikely that Mr. Justice Newbould’s comments in rejecting those arguments were intended to preclude the adoption of a different appeals procedure for much smaller claims against the other EMEA Companies, but the detailed design of the adjudication and appeals process for the CVAs is clearly a matter to which the Administrators will wish to give close consideration.

The Administrators' Statement of Proposals for NNSA contained the same statements to creditors regarding the distribution of assets in accordance with local law as were contained in all of the other Statements of Proposals. However, as set out above, secondary insolvency proceedings were opened in respect of NNSA in France in May 2009, and its assets situated in France are subject to those secondary proceedings. As the statements made by the Administrators were designed to avoid such secondary insolvency proceedings, the Administrators do not consider that it would be appropriate for them to seek to give effect to those statements in the English administration. Instead, consistent with Articles 3(2) and 27 of the EC Regulation, they propose that the assets of NNSA which are situated in France should be distributed in the French liquidation in accordance with French law; and the remaining assets of NNSA situated outside France should be distributed in accordance with English law under Article 4(2)(i) of the EC Regulation.

It might be thought that this result would be achievable simply by the Administrators giving notice of their intention to make a distribution in the administration of NNSA under Rule 2.95 in the same way as with NNUK. There is, however, a problem with adopting that approach because there is uncertainty as to which of the assets of NNSA are Main Proceeding assets and which are Secondary Proceeding assets. That issue - and how to resolve it - has arisen in proceedings brought in 2011 by the Comité d’enterprise (Works Council) of NNSA against the French liquidator in the Commercial Court in Versailles, France. Those proceedings sought the payment by the French liquidator of monies from various bank accounts of NNSA without reference to any costs resulting from the continuation of the business of NNSA or its participation in the IFSA, payment of which costs the Administrators had sought from the same funds. The French liquidator sought to join the Administrators as third parties to those proceedings, and the Administrators asked the French court to decline jurisdiction in favour of this court.

The case was referred to the European Court of Justice by the Commercial Court in Versailles in 2013 (case C-649/13), and the ECJ gave its ruling on 11 June 2015: Comité d’enterprise de Nortel Networks SA v. Cosme Rogeau and others. The ECJ held that (i) Articles 3(2) and 27 of the EC Regulation must be interpreted as meaning that the French courts and the English courts have concurrent jurisdiction to rule on the determination of NNSA’s assets falling within the scope of the effects of the liquidation in France; and (ii) the assets that fall within the scope of the effects of secondary insolvency proceedings must be determined in accordance with Article 2(g) of the EC Regulation.

The ECJ’s ruling has yet to be put into effect in the liquidation in France or in the administration in England. The Administrators are therefore not presently in a position to seek permission to make distributions to NNSA’s unsecured creditors pursuant to paragraph 65(3) of Schedule B1 of the Act until the issue of which assets are situated where is resolved. That in turn may require consideration of NNSA’s allocation of the monies from the Lockbox, which itself will depend upon the level of allowed claims against NNSA for the purposes of the allocation ruling of the US and Canadian courts.

In that respect, the French liquidator has already conducted a claims process, and indeed a bar on any further claims being submitted has been imposed in the liquidation under French insolvency law. The view of the Administrators, however, is that the fact that such a process has taken place in the secondary proceedings in France does not render it unnecessary or inappropriate for the Administrators to conduct a claims determination in the main insolvency proceedings in England, because there may be creditors who would be entitled to claim against NNSA who failed to file their claim by the bar date imposed in the French liquidation. I agree, and consider that it is desirable that the Administrators commence a claims determination process in the UK for NNSA’s creditors so that they can ensure that the interests of NNSA and its creditors in the Lockbox is fully protected.

The Administrators consider that the most effective way to introduce such a claims determination process and, if there is an amount available for distribution in due course, to effect a distribution to NNSA’s creditors, is to promulgate a CVA on similar terms to those which will be proposed in relation to the other EMEA Companies (above). The main difference will be that because the Administrators will only have Main Proceeding assets to distribute, the distribution process will apply English law priorities. Again, I agree that this is an appropriate course for the Administrators to follow.

For the reasons that I have outlined, the Orders that I have made are intended to permit the Administrators to institute fair and efficient procedures for requiring creditors of the EMEA Companies to file their claims against the companies, and for their adjudication, so as to permit those companies to share in the allocation of the monies in the Lockbox.

The Administrators are generally to be at liberty to seek further directions from this court so as to ensure that they meet any requirements under the IFSA and/or as may be imposed by the US and Canadian courts for participation of the EMEA Companies in the allocation of the Lockbox monies.