CASE STUDY II – ADAM CRANE

MEMORANDUM OF ADVICE

Matter No:	MAXIM.001.001
Matter Name:	Benedict Maximov and Efwon Group
Date:	26 April 2024
Subject:	Advice on Restructuring Efwon Group

You have asked us for advice on how to protect your personal position, the position of Efwon Investments Inc (Efwon Investments) and your ownership of the Maximov F1 Team.

All monetary amounts set out below are in US Dollars.

Corporate Structure

We understand that Efwon Investments (incorporated under the laws of Texas, United States of America) is the holding company for several subsidiary companies and that you (Benedict Maximov) are the sole owner of Efwon Investments:

Efwon Trading B.V. (Efwon Trading), is incorporated under the laws of the Netherlands and is wholly owned by Efwon Investments.

Efwon Romania, is incorporated under the laws of Romania and is a wholly owned subsidiary of Efwon Trading and trades as Team Maximov.

Efwon Singapore, is incorporated under the laws of Singapore and is a wholly owned subsidiary of Efwon Romania.

Efwon Investments, Efwon Trading, Efwon Romania and Efwon Singapore are collectively known as the Efwon Group.

Debt Obligations, Security Granted and Other Creditor Claims

The debt obligations and security granted for you personally and each of the companies of the Efwon Group are set out below.

Benedict Maximov:

You have injected $100 million in equity into Efwon Investments.

Efwon Investments (total debt obligations: $250 million):

Efwon Investments has borrowed $250 million ($250m Loan) from a group of United States syndicated lenders (the US Lenders) at an interest rate of LIBOR plus 4% (this was increased to 6% in 2015).

The $250m Loan is secured by:

Security over your homes across the globe which are collectively worth $75 million.

A pledge on the projected revenue from the revenues generated by Efwon Investments.

A pledge over your shares in Efwon Investments.

A positive pledge and a negative pledge, both unspecified.

The US Lenders include Senior Lenders (2 banks with aggregate exposure of $100 million), Mezzanine Lenders (2 lenders with aggregate exposure of $60 million), and Junior Lenders (5 lenders with aggregate exposure of $90 million).

Efwon Trading (total debt obligations: $450 million):

Efwon Trading has borrowed $350 million ($350m Loan) from Efwon Investments, which is secured by:

A security interested granted to Efwon Investments on future revenue generated by Efwon Trading.

A pledge over Efwon Investments shares in Efwon Trading in favour of the US Lenders as security for the $250m Loan.

Efwon Trading has borrowed $100 million (Monaco Loan) from a lender based in Monaco (Monaco Lender) which is secured by:

A security interest over Efwon Trading’s revenues.

A security interest over Efwon Romania’s revenues.

A security interest over Efwon Singapore’s revenues

Efwon Romania (total debt obligations: $450 million+):

Efwon Romania borrowed $150 million from Efwon Trading in 2014 which is secured by:

Efwon Romania’s share of the broadcasting revenue from the Formula One Group.

Efwon Romania borrowed $100 million from Efwon Trading in 2016 and another $100 million from Efwon Trading in 2017which is unsecured. It is unknown at this time whether these loans totalling $200 million are also secured by the broadcasting revenue from the Formula One Group.

Efwon Romania has guaranteed Efwon Trading’s debt owed to the Monaco Lender in the amount of $100 million.

Efwon Romania also faces unquantified (but substantial) claims by two of the drivers from Team Maximov who have brought claims against Efwon Romania before the Romanian courts.

Efwon Singapore (total debt obligations: $100 million)

Efwon Singapore has guaranteed Efwon Trading’s debt owed to the Monaco Lender in the amount of $100 million.

Whilst the Efwon Group has generated some revenue which has been used to pay down debt obligations, Efwon Investments, Efwon Trading, Efwon Romania and Efwon Singapore are each in financial distress and owe their creditors significant sums of money.

Urgent Issues and Steps

The Efwon Group is facing considerable pressure from its creditors. Most notably, the US Lenders and the Monaco Lender are considering enforcement measures which can impact all of the entities within the Efwon Group. Furthermore, Efwon Romania is facing insolvency proceedings in Romania by two of the drivers on Team Maximov (Team Maximov Drivers) resulting from injuries they suffered in 2023. And Efwon Romania is also facing freezing injunctions over its assets and income, which will cause Efwon Trading to default on its payment obligations, causing a default by Efwon Investments.

A) Forbearance / Standstill:

Ordinarily, it is advisable to for a debtor company or group of companies to seek agreement with its stakeholders that all stakeholders will comply with the INSOL International Statement of Principles for a Global Approach to Multi-Creditor Workouts II (Statement of Principles). However, the Efwon Group may not have success with this approach particularly where:

Efwon Romania is facing imminent insolvency proceedings and freezing injunctions; and

The entities in the Efwon Group cannot service its debt load without the sponsorship deal from KuasaNas and where there is no time to find another partner/investor.

B) Stay of Proceedings

To get some breathing room, the Efwon Group will have to consider and take steps to prevent the enforcement and other legal actions by stakeholders. This includes in:

United States by the US Lenders against Efwon Investments.

The Netherlands by the US Lenders and Monaco Lender against Efwon Trading.

Romania by the Monaco Lender and the Team Maximov Drivers against Efwon Romania.

Singapore by the Monaco Lender against Efwon Singapore.

Summary of Recommendations

Based on the information we presently have, and noting that our recommendation could change based on learning new information, our recommended approach is to commence parallel proceedings in the United States under Chapter 11 of the United States Bankruptcy Code (Bankruptcy Code) and in the Netherlands under the Wet Homologatie Onderhands Akkoord (WHOA).

Efwon Investments should commence Chapter 11 proceedings in the United States and seek approval of restructuring plan.

Efwon Trading, Efwon Romania and Efwon Singapore should collectively commence a public or private (see discussion below) group WHOA proceedings in the Netherlands.

Immediately after the commencement of the WHOA proceedings, Efwon Trading should seek recognition of the WHOA proceedings in the United States under Chapter 15 of the Bankruptcy Code.

Cross-border recognition of the WHOA proceedings in respect of Efwon Singapore should be sought in Singapore.

The proposed approach is aimed reducing the amount of insolvency proceedings in different courts and the length of proceedings, and minimising the overall costs of the restructuring efforts.

Chapter 11 Proceedings for Efwon Investments

We recommend that Efwon Investments files a voluntary petition under Chapter 11 of the Bankruptcy Code. This will allow Efwon Investments to obtain some breathing space because of the automatic stay of proceedings which prevents secured and unsecured lenders from enforcing against Efwon Investments without permission of the US Bankruptcy Court (11 USC § 362).

It may also be necessary for you to also file Chapter 11 proceedings to avoid the US Lenders enforcing their securing by foreclosing on your properties (at least in the US and elsewhere if necessary) (11 USC § 362).

A Chapter 11 process is appropriate because all of Efwon Investment’s creditors are based in the United States.

The Chapter 11 process is a debtor-in-possession proceeding which will allow you to retain in control of Efwon Investments whilst pursuing negotiations with the stakeholders. Efwon Investments will be temporarily relieved from prepetition debts but will be obligated to pay post-petition expenses.

Efwon Investments has the exclusive right to propose and file a restructuring plan within the first 120-days after commencing the Chapter 11 proceedings (11 USC § 1121).

Section 1122 of the Bankruptcy Code sets out the classification of claims or interests. Consideration will have to be given whether the US Debtors are all within the same class or fall into separate classes based on their debt structures.

Section 1123 of the Bankruptcy Code sets out the requirements for the content of the restructuring plan including but not limited to the classes of claims, the classes of claims or interests not impaired and those that are impaired under the plan, and the steps for implementing the restructuring plan.

Under Section 1126(c) of the Bankruptcy Code, a class of creditors is deemed to accept a restructuring plan if creditors with two-thirds in value and the majority in number vote in favour of the restructuring plan.

Since the US Debtors are all external debtors to the Efwon Group, the Efwon Group will have to work exceptionally hard to convince the US Debtors that they will do better off with the restructuring than if a liquidation becomes necessary. Even with the expansive security package the US Lenders have, if the Efwon Group stops participating in Formula One, it is likely that the US Lenders are completely under secured.

Efwon Investments could persuade the US Debtors to vote in favour of a plan by having some kind of lock-up agreement or ensuring that they will receive a significant immediate payment upon the successful completion of the restructuring of the Efwon Group which should be achievable in the circumstances where KuasaNas has signalled a willingness to pay part of the total consideration for the purchase of the 51% majority stake of Team Maximov / Efwon Romania. These funds could also be used to fund payments to the Monaco Lender in the global restructuring efforts of the Efwon Group.

More information is necessary in order to consider the potential of achieving a successful Chapter 11 restructuring plan, including:

The quantum of the payment by KuasaNas for the 51% stake, if any.

The outstanding balances owing to the US Lenders and their appetite for taking a haircut on the debt they are owed, if any,

The ability to obtain DIP financing.

If Efwon Investments obtained the requisite creditor votes for their restructuring plan, the next stage would be to seek plan confirmation from the US Bankruptcy Court which will make the restructuring plan binding on all relevant stakeholders (11 USC § 1129(a)).

As a final comment, US Chapter 11 proceedings can be incredibly quick with pre-packages restructurings if all of the requisite creditor and shareholder approvals are in place (subject to any necessary cram downs). However, the Chapter 11 proceedings can become long and expensive processes.

WHOA Proceedings

We recommend commencing WHOA scheme of arrangement proceedings (WHOA Proceedings) in the Netherlands under the Dutch Bankruptcy Act (DBA) by Efwon Trading, Efwon Romania and Efwon Singapore (collectively the Efwon WHOA Entities), with Efwon Trading being the main debtor. A WHOA scheme or restructuring plan has very little Court involvement and is therefore a less expensive process compared to a US Chapter 11 filing. Much like the Chapter 11 proceedings, the WHOA scheme is a debtor-in-possession process.

DBA Article 370 allows a debtor (Efwon Trading) to offer its creditors and shareholders a restructuring plan providing for an amendment of their rights.

It is important to consider whether we file for public or private WHOA Proceedings. If we file for a public WHOA process, the restructuring plan will be automatically enforceable in Romania under the Recast European Insolvency Regulation (EIR) (EIR, Article 1, Annex A, Article 32(1), and Recital 9). If we proceed with the private process, the restructuring plan is not automatically enforceable in Romania (DBA, Articles 12 and 13). However, the private process provides for more flexibility to include Efwon Romania and Efwon Singapore in the WHOA restructuring plan process because of their guarantees of Efwon Trading’s debt to the Monaco Lender (no requirement for the centre of main interests (COMI) of the entities to be located in the Netherlands).

For the WHOA restructuring plan to be automatically effective in other European Union (EU) Member States, the proceedings must be commenced in a debtor’s COMI. Article 3 of the EIR defines COMI as the “place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties.” However, the “registered office shall be presumed to be the centre of main interests in the absence of proof to the contrary.”

Article 19(1) of the EIR states that “Any judgment opening insolvency proceedings handed down by a court of a Member State which has jurisdiction pursuant to Article 3 shall be recognised in all other Member States from the moment that it becomes effective in the State of the opening of proceedings.”

Recital 53 of the EIR allows for the possibility of a group insolvency proceeding in a single jurisdiction if the COMI of each of the companies in the group is located in a single member state (the Netherlands).

An analysis of the COMI of each of the Efwon WHOA Entities should be undertaken (See COMI Analysis below). It is reasonable to conclude that Efwon Investments and Efwon Singapore have their COMI in the Netherlands. It is arguable that Efwon Romania has its COMI in the Netherlands.

In any event, it is likely that an approved WHOA scheme for Efwon Romani will be effective in Romania regardless of whether the public or private WHOA process is pursued. Many scholars have suggested that private WHOA restructuring plans can be recognised in other EU Members States through the Recast Brussels Regulation since the automatic recognition under the EIR is unavailable.

Under DBA Article 372, the WHOA proceedings can allow for the amendment of creditors’ rights against other legal entities within the debtor’s group of companies if:

The rights of the creditors of towards legal persons concerned are intended to satisfy or secure the performance of obligations of the debtor or of obligations for which those legal persons are liable with or in addition to the debtor;

The Efwon WHOA Entities are in the situation which it may reasonably be assume that they will be unable to pay their debts as referred to in DBA Article 370(1).

The Efwon WHOA Entities have agreed to the proposed amendment, or the restructuring plan is offered by a plan expert as referred to in DBA Article 371; and

The Court would have jurisdiction if the legal entities would find themselves offer a restructuring plan under DBA Article 372 as per Article 383(1).

Under DBA Article 376, the Efwon WHOA Entities can seek a group-wide stay of proceedings which is granted for a period of four months (and further extensions up to eight months maximum in appropriate circumstances). This is not an automatic stay like the Chapter 11 proceedings, but the Dutch court can grant the group-wide stay where:

The stay is necessary for the continuation of the business of the Efwon WHOA Entities during the preparation and negotiation of a restructuring plan; and

At the time a stay is ordered, it may reasonably be assumed that the stay is in the interests of the joint creditors of the Efwon WHOA Entities and not harm the interests of third parties.

It is important to seek a stay of proceedings immediately to put a halt to the insolvency process and potential injunctions sought by the Team Maximov Drivers in Romania.

DBA Article 375 sets out all information to be included in a restructuring plan for consideration and vote by creditors and shareholders, including but not limited to:

The class allocation and criteria according to which creditors and shareholders are allocated to one or more classes;

The financial consequences of the restructuring plan per class of creditors and shareholders;

The value that is expected to be realised when the restructuring plan is concluded;

The proceeds to be realised in the event of liquidation of the assets of the debtor in bankruptcy

Under DBA Article 378, the Efwon WHOA Entities can ask the Dutch court to make a ruling on various aspects that are relevant to the context or realisation of the restructuring plan, including the content to be contained in the restructuring plan, class allocation, voting procedure, etc.

Since there are few stakeholders, it will likely be unnecessary to appoint an observer under DBA Article 380 (who would ordinarily be tasked with supervising the realisation of the restructuring plan).

Under DBA Article 381(3), all creditors and shareholders whose rights are amended on the basis of the restructuring plan are eligible to vote. Under DBA Article 381(7), a class of creditors approves the restructuring plan if the resolution to approve is adopted by a group of creditors holding at least two-thirds of the total amount of claims belonging to the creditors who have cast a vote in that class. Under DBA Article 381(8), a class of shareholders approves the restructuring plan if the resolution is approved by a group of shareholders holding at least two-thirds of the total amount of issued capital who have cast a vote in that class.

The shareholders approval should be non-controversial because the Efwon WHOA Entities are all wholly owned by entities within the Efwon Group. It is possible that the restructuring plan can include the purchase of the 51% of the shares in Efwon Romania by KuasaNas. Efwon Investments and Efwon Trading as the 100% owners of the relevant entities will clearly support the restructuring plan.

As for the creditor voting, the creditor landscape is as follows for the Efwon WHOA Entities:

Efwon Trading:

Creditors: US Lenders, Efwon Investments and Monaco Lender

Efwon Romania:

Creditors: Efwon Trading, Monaco Lender, Team Maximov Drivers

Efwon Singapore

Creditors: Monaco Lender

As stated above, we need additional information to help determine whether a vote would be successful in respect of each of the Efwon WHOA Entities. Even if Efwon Trading were to get the full support of the Monaco Lender, it appears that Efwon Trading would not achieve the two-thirds requirement as the combined debt of Efwon Investments and the Monaco Lender accounts for 64.2% of the total debt obligations of Efwon Trading if the US Lenders’ $250m Loan is taken into consideration.

If the Monaco Lender’s full support is achieved, then Efwon Romania and Efwon Singapore are most likely to obtain the requisite voting approvals.

In terms of the procedural process:

If at least one class of creditors approves the restructuring plan, a debtor can request that the Dutch court confirm the plan (DBA Article 383(1)).

The restructuring plan must be submitted to creditors and shareholders no less than eight days before the vote (DBA Article 381(1)).

Once the restructuring plan is approved, a report must be produced within seven days, outlining the particulars of the vote and whether the debtor will seek court approval. The report must be provided to creditors and shareholders without delay (DBA Article 382(1)).

A hearing to confirm the restructuring plan must be held at least eight days and no more than fourteen days after the request for court confirmation and the report being made available for inspection at the court registry (DBA Article 383(6)).

The Dutch court can confirm the plan or reject it if certain statutory provisions apply (DBA Article 384).

Under DBA Article 385, a confirmed plan will be binding on all creditors and shareholders even if they voted against the plan.

As for the effectiveness of the approval of the WHOA restructuring plan in Romania, the EIR causes the plan to be automatically effective in Romania if Efwon Romania’s COMI is in the Netherlands and the WHOA Proceedings are public proceedings. Otherwise, the WHOA restructuring plan or any other orders will not be automatically enforceable. We believe that the stay of proceedings against Efwon Romania and the WHOL restructuring plan can be enforced in Romania under the Recast Brussels Regulation but further research may be required on this point.

Chapter 15 Proceedings for Efwon Trading

We recommend that Efwon Trading seek recognition of the WHOA Proceedings and ultimately the restructuring plan (if one is achieved) in the United States under Chapter 15 of the Bankruptcy Code. This step should be taken immediately after the WHOA Proceedings are commenced to seek a stay of proceedings as discussed below in order to prevent any enforcement action in the United States by the US Lenders against Efwon Trading.

Chapter 15 of the Bankruptcy Code adopts the UNCITRAL Model Law on Cross-Border Insolvency (the Model Law).

In the Diebold Nixdorf Dutch Holding B.V. Chapter 15 proceedings, the US Bankruptcy Court accepted that a private WHOA proceeding and resulting restructuring plan can be recognised as a “foreign proceeding” under Section 1502 of the Bankruptcy Code as it qualifies as a “collective juridical or administrative proceeding in a foreign country, including an interim proceeding, under a law relation to insolvency or adjustment of debt in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation.”

Efwon Trading by its “foreign representative” can petition for the recognition of the WHOA Proceedings as either a foreign main proceeding or a foreign non-main proceeding (11 U.S. Code § 1517). If the US Bankruptcy Court recognises the WHOA Proceedings as a foreign main proceeding, Efwon Trading will be entitled to a stay of proceedings within the United States (11 U.S. Code § 1520). If the US Bankruptcy Court recognises the WHOA Proceedings as a foreign non-main proceeding, Efwon Trading will have to request that the US Bankruptcy Court grant a stay of relief (it is not automatic on recognition) (11 U.S. Code § 1521).

It is likely that the US Bankruptcy Court will recognise the WHOA Proceedings in relation to Efwon Trading as a foreign main proceeding as it appears that Efwon Trading’s COMI is in the Netherlands.

Efwon Trading can establish jurisdiction to seek Chapter 15 relief by having property in the United States (11 U.S. Code § 109) which can be a retainer in a law firm that is deposited immediately before the proceedings are commenced.

Efwon Singapore Proceedings

For added measure to protect against the enforcement of the guarantee by Efwon Singapore of Efwon Trading’s debt to the Monaco Lender, we recommend seeking the cross-border recognition of the Dutch WHOA Proceedings and restructuring plan (if one is achieved) in respect of Efwon Singapore in Singapore under the Third Schedule of the Insolvency, Restructuring and Dissolution Act 2018 (IDRA). The Third Schedule of the IDRA incorporates the UNCITRAL Model Law on Cross-Border Insolvency.

Similar to the analysis set out above in respect of the Chapter 15 Proceedings for Efwon Trading, the Supreme Court of Singapore can grant recognition of Efwon Singapore’s WHOA restructuring plan and proceedings as either a foreign main proceeding or a foreign non-main proceeding. Since we have suggested that Efwon Singapore’s COMI is the Netherlands, the Supreme Court of Singapore is likely to recognise the Efwon Singapore’s WHOA restructuring plan as a foreign main proceeding. This is beneficial as Efwon Singapore will be entitled to a stay of proceedings in Singapore upon recognition (IDRA Article 20). However, if recognised as a foreign non-main proceeding, Efwon Singapore or its foreign representative can apply for a stay under Article 21 of the IDRA.

Similar to the Chapter 15 proceedings, it is likely that the Supreme Court of Singapore will recognise the WHOA Proceedings for Efwon Singapore and a foreign proceeding under Article 17 of the IDRA as the definition of a foreign proceeding is similar:

“a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, under a law relating to insolvency or adjustment of debt in which proceeding the property and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation.”

Recognition in Singapore will prevent action by the Monaco Lender against Efwon Singapore.

Coordination of Proceedings

We recommend seeking a cross-border protocol to coordinate the proceedings and to facilitate court-to-court communications. The United States Bankruptcy Court for the Southern District of Texas, the District Court Midden-Nederland (the Netherlands), and the Supreme Court of Singapore have all adopted the Judicial Insolvency Network Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters (JIN Guidelines). The United States Bankruptcy Court for the Southern District of Texas and the Supreme Court of Singapore have both also adopted the JIN Modalities of Court-to-Court Communication (Modalities).

Whilst the Dutch court recently rejected the proposed protocol in the Mercon Coffee Group Chapter 11 and Dutch WHOA proceedings (Mercon Proceedings), the Dutch court recognised the importance of cross-border cooperation and court-to-court communication in transnational and parallel insolvency proceedings. In the Mercon Proceedings, the Dutch court rejected the proposed protocol because the US Bankruptcy Court approved version contained special provisions which did not fully comply with Dutch civil law. Any proposed cross-border protocol will have to be crafted in a way that does not offend the laws of the United States, the Netherlands and Singapore.

The JIN Guidelines stipulate, inter alia, that a protocol under the JIN Guidelines should be procedural in nature, promote the timely and efficient administration of the parallel proceedings, permit communications between the foreign courts, give directions for notice to be providing to parties in other jurisdictions, authorise a party or representative to appear and be heard before a foreign court, and permit joint hearings if necessary.

A cross-border protocol should set out its aims and purposes (to facilitate cooperation and communication), the ability to appear and be heard in the respective courts, mechanisms for facilitating communication amongst the parties and courts, coordinate asset preservation and/or sale, etc.

To the extent proceedings are required in Romania, the courts in Netherlands and Romania can facilitate communication and cooperations under the EIR and in accordance with the EU Cross-border Insolvency Court-to-Court Cooperation Principles and Guidelines.

Should Efwon Trading Structuring Through England Rather than the Netherlands

The Efwon Group should not have structured Efwon Trading through England rather than the Netherlands.

Whilst the Part 26A restructuring plan under the Companies Act 2006 provides for a flexible tool to achieve an effective restructuring, it does not offer the automatic recognition under the EIR.

That said, England has adopted the Model Law, so any restructuring plan achieved in England in respect of Efwon Trading and its subsidiaries including Efwon Romania and Efwon Singapore, could be recognised in Romania and Singapore under the Model Law as adopted in those jurisdictions.

In order to obtain approval for a scheme of arrangement in England, a debtor is required to get approval of 75% or more in value and more than 50% in number of the creditors in each class. For restructuring plans under Part 26A, a debtor must secure at least one class of creditors voting to approve a plan which holds 75% or more in value. A cross-class cram down is available in England if none of the dissenting creditors would be worse off as a result of the restructuring plan than in the relevant alternative. However, the English Court of Appeal in the Adler Group restructuring proceedings, recently held that instead, the Court must take into consideration the value sought to be preserved or generated by the restructuring plan over and above the relevant alternative, and how that is to be allocated among the different creditor groups.

In the circumstances, it seems that the test for obtaining approval of a scheme of arrangement or a restructuring plan under the relevant English legislation (including a cross-class cram down where applicable) carries a much higher burden than under WHOA proceedings in the Netherlands.

COMI

We have set out a brief analysis of COMI for Efwon Trading, Efwon Romania and Efwon Singapore based on the limited information we have. It is unnecessary to consider the COMI of Efwon Investments as Efwon Investments is based in the United States and all of its creditors are based in the United States – it is unnecessary to seek recognition of the Chapter 11 proceedings and any approved restructuring plan in any other jurisdiction.

The starting position, and rebuttable presumption under both the Model Law and the EIR is that a company’s COMI is its registered office. COMI must be assessed on an entity-by-entity basis.

Under the Model Law, COMI is considered to be the location of a debtor’s head office functions or nerve centre. Other factors that have been highlighted in case law include but are not limited to the location of a debtor’s books and records, where a financing was authorised, where the cash management system was run, the location of employees, the location of the controlling law or the law governing the main contracts, the location of the majority of creditors, and location of a debtor’s primary assets.

For Efwon Trading, it is a Netherlands company with presumably a Netherlands registered office. It appears to be the central operating entity for the Efwon Group, as the entity responsible for sourcing the racing team in Romania, facilitating the requisite borrowing to fund Team Maximov, and entering into the other relevant contracts for the Efwon Group.

As for Efwon Romania, besides the functional aspects of the racing team (drivers, machines, etc) which likely travel around globally from race to race not having a truly fixed location, it appears that the relevant administrative functions for Efwon Romania are handled by Efwon Trading in the Netherlands. However, even if Efwon Romania’s COMI is considered to be in Romania (which is possible), this is not detrimental to the proposed restructuring plans for the reasons outlined above.

Efwon Singapore was set up to facilitate the sponsorship. It would appear that the administrative functions of Efwon Singapore are facilitated by Efwon Trading.

We are missing relevant information which would help assess the COMI of each of these entities including where directors and officers are located, where offices are located, the governing law of the relevant contracts, and the location of employees.

Conclusion

Subject to getting further information as outlined above, we consider that the approach we have proposed will give you the best chance of achieving your objectives of maintaining your equity in Efwon Investments, maintaining general control over the Efwon Group, and selling the 51% stake of Efwon Romania to KuasaNas subject to Malaysian Government approvals.

Please do let us know if you have any inquiries or wish to have a telephone call to discuss our advice. We recommend that you take prompt action to have the best chance of a successful restructuring.

Adam D Crane

See INSOL International, Foundation Certificate in International Insolvency Law – Module 6E Guidance Text, The Netherlands, at pg. 46.

A group-wide stay of proceedings was obtained in the Diebold Nixdorf Dutch WHOA scheme proceedings (Diebold Nixdorf Proceedings) which involved Dutch entities as well as entities from other EU Member States. The Diebold Nixdorf proceedings followed the private WHOA process.

Ascentra Holdings, Inc v SPGK Ptd Ltd [2-23] SGHC 82.

[2024] EWCA Civ 24.

UNCITRAL, Digest of Case Law on the UNCITRAL Model Law on Cross-Border Insolvency, 2021.