White & Case acts for Noteholder group in defeating jurisdiction challenge in Essity Loan Note event of default claim

Global law firm White & Case LLP has advised an ad-hoc group of Noteholders (the group), defeating a jurisdiction challenge against a claim brought by the group against Swedish health and hygiene conglomerate, Essity.

Essity is the issuer of three series of Euro Medium Term Notes that contain event of default provisions which are triggered upon the cessation of “all or a substantial part” of the issuer’s business.  The group commenced proceedings against Essity in December 2024 seeking declarations that the March 2024 sale by Essity of its majority stake in Asian subsidiary Vinda International Holdings Limited triggered an event of default, in consequence of which the Noteholders are entitled to instruct their custodians to “accelerate” the repayment by Essity of their Notes.

In a judgment handed down on 16 June 2025, following a hearing in May, Mr Justice Fancourt dismissed the application brought by Essity challenging the ability of bondholders to claim against the issuer of the notes in view of the “no look through” intermediated structure in which the notes are held. The judgment is important to capital markets, being one of the first instances where the English High Court has recognised the legitimate interest of bondholders, as the ultimate economic holders and creditors, in obtaining declaratory relief with respect to terms and conditions of notes notwithstanding that such bondholders are not contractual counterparties.

The group includes funds managed by Oaktree Capital Management, Caxton Associates, Northlight Group, Sona Asset Management and Sparta Capital Management.

The White & Case team which advised the group includes partners Swati Tripathi and James Greene (both London) and Thierry Bosly (Brussels); associates Oli Bowley and Marlin Heitmann, and trainee Amber Richardson (all London). Tom Smith KC and Annabelle Wang of South Square Chambers also acted for the  group.

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