Cancellation Of The Enforcement Of A Pledge By The Luxembourg Courts

So far, the automatic enforcement of a pledge under the law of 5 August 2005 on financial collateral arrangements (the "2005 Law") had been interpreted by some as a barrier to the annulment of such enforcement. On July 10th 2013, the District Court of Luxembourg, in a commercial judgment (No 1089/13, roles No. 120206, 121127 and 122468), gave a judicial interpretation to this issue, ordering the pledgee PILLAR SECURITISATION S.à r.l., to return to the pledgor, R CAPITAL S.à r.l.(represented by Bonn Steichen & Partners) the shares of IMMO-CROISSANCE SICAV-FIS, which are in its possession following the abusive and fraudulent realization of the pledge.

The Court first reminded that the 2005 Law allows the realization of a pledge without any judicial intervention under the sole condition of apparent regularity. The Court...