As regular readers will know, April brought two big judgments for the CMBS and structured finance markets in the Windermere VII CMBS and Titan Europe CMBS Class X cases. Now that the dust has settled, it is worth stepping back and looking at the wider perspective of what the decisions mean for future deals, the prospects of future claims, and the courts’ evolving approach to complex finance cases.

In an article published on our website (here) we pick out five learning points:

  • There is still a problem with inconsistency in the High Court’s approach to structured finance disputes, even in the new Financial List era.
  • Financial List judges seem to agree that a tailored approach to interpreting complex finance agreements is needed. But they cannot yet agree what that approach should be.
  • The trend of High Court decisions continues to be “pro-senior” in disputes between junior and senior creditors. There is no reason to perceive bias: the drivers behind the pattern are more likely to be structural.
  • The courts have given some fresh encouragement to creative attempts to use general legal principles to attack agreed terms from the outside.
  • The continuing long delays in the Court of Appeal lists mean that these judgments will be important in how future cases are decided at least until March 2017.

As two of only a handful of High Court decisions focused on CMBS structures, these judgments should be considered carefully by market participants.