FL-2022-000014 - [2025] EWHC 2631 (Ch)

In December 2019 a series of agreements was entered into in order to provide finance to the Katerra Group, through the issue of notes under the Fairymead Note Programme.

GL entered into the RPA dated 9 December 2019 with the Katerra Sellers. The RPA provided a framework for the Katerra Sellers to sell, or purportedly sell, Receivables to GL and the terms on which they did so.

The definition of “Receivables” included both obligations owing to the Katerra Sellers by Account Debtors (“Actual Receivables” or “ARs”); and expected future amounts intended to become payable as a result of anticipated future sales of goods or services (“Future Receivables or FRs”).

The RPA included “Collections” in the definition of Purchased Receivables, which referred to cash collections with respect to receivables.

The Katerra Sellers and Katerra Cayman provided GL with various different forms of security in respect of the obligations under the RPA. These were essentially cross-guarantees given by Katerra Group companies and Account Control Agreements between GL, various of the Katerra Sellers, and two banks at which those Katerra Sellers held deposit accounts.

GL filed UCC-1 financing statements pursuant to the Uniform Civil Code (“UCC”, a model act adopted by all US States) in respect of security held by the Katerra Sellers by 12 December 2019. GL’s security interest in the Account Security was perfected upon execution and delivery of the Account Control Agreements.

The financing provided under the RPA was funded by the issue of notes under the Fairymead Note Programme, originated by GCUK.

The relationship between GL and GCUK was set out in the Participation Agreement dated 19 December 2019, under which GL granted GCUK “Participations” in the Receivables under the RPA. These were essentially contractual rights to be paid sums equivalent to the Receivables payable by the Katerra Sellers to GL.

GL also granted GCUK security for its obligations under the Participation Agreement in the form of a Security Agreement dated 19 December 2019.

GCUK originated notes under the Fairymead Note Programme to fund the obligations under the Participation Agreement and RPA.

On 19 December 2019 GCUK notified Hoffman of “the PBB Product Schedule”, which stated that it was made pursuant to the Master Assignment Agreement dated 21 December 2017 (“MAA”). The PBB Product Schedule stated that, in respect of any Offer and purchase of Payment Obligations assigned the Product Code “PBB” in the Offer File relating thereto, the MAA would be deemed to be amended, supplemented and modified to the extent set out in Part 2 to the PBB Product Schedule. The Product Code PBB was used in Offer Files from at least 14 September 2020 and in each of the relevant Offer Files as regards the Fairymead Notes.

The MAA operates as an umbrella agreement setting out the terms on which GCUK could sell and assign its right, title and interest in a Payment Obligation, and all of GCUK’s Additional Rights relating to that Payment Obligation, to Hoffman.

On 18 December 2019 Hoffman and Citibank entered into the Second Supplemental Trust Deed B to the Master Trust Deed dated 21 December 2017 (together, “the MTD”).

The MTD contemplated agreement to a “Pricing Supplement” and a “Series Supplement” which would include a Product Annex, Product Specific Conditions and Cash Collection and Allocation Annex. A Series Supplement Number 1 containing a draft form of Pricing Supplement incorporating a draft Supplemental Trust Deed, and a Product Annex containing Project Specific Conditions of the Notes, was also signed on 18 December 2019.

The MTD and the Series Supplement Number 1 set out terms on which Hoffman would issue the Fairymead Notes, and on which security might be created and held for the noteholders of the Fairymead Notes by Citibank.

The Fairymead Note Programme may be represented as follows: