Sequana Achieves Appellate Victory in UK Supreme Court

Skadden won a significant U.K. Supreme Court victory on behalf of the former directors of AWA, a subsidiary of French paper manufacturer Sequana S.A. Appellant BTI’s claim concerned a €135 million dividend paid by AWA, which later became insolvent, to its sole shareholder Sequana, and whether the directors could be liable to compensate creditors for that dividend notwithstanding it having been lawfully paid.

On October 5, the Supreme Court unanimously dismissed BTI’s appeal, holding that while English company directors can in certain circumstances have an obligation to consider the interests of creditors, it was not triggered where there was only a remote, even if real, risk of insolvency. The decision is the first time the U.K.’s highest appellate court has affirmed that English law contains a requirement that directors consider creditor interests and the circumstances in which it arises.