New developments in the wake of the Tennor Holding insolvency ruling

In its decision of 21 December 2021, the Amsterdam Court of Appeal overturned the 2 November 2021 decision of the Amsterdam District Court that had declared Tennor Holding unable to meet its liabilities and ordered it to file for bankruptcy. The Amsterdam Court of Appeal held that Tennor Holding had successfully obtained a stay of the Corvallis proceedings (approximately €35.9 million in principal for an outstanding debt) and those of its other major creditors: the latter undertook not to assert their claims for a period of 6 months.

Although H2O has never disclosed the share of the bonds held in the H2O Side-Pockets (funds that have been closed to redemptions since August 2020) amongst the €1.450 billion in “First Super Senior Secured Notes” purchased in May 2021 from Tennor Holding, the H2O Side-Pockets are likely to be one of Tennor Holding’s main creditors.

This means that H2O has yet again, and without notifying the holders of Side-Pockets units, waived asserting the rights of the Side-Pockets against Tennor Holding and has thus flouted the interests of its own investors. In addition, it is clear that the so-called guarantees announced by H2O in May 2021 in respect of the new Tennor Holding bonds that replaced (at a substantial discount) the previous bonds held by the Side-Pockets do not even enable the Side-Pockets to outperform any ordinary creditor holding older bonds worth at least twenty times less.