Hedge funds holding floaters fail again in case against Belvedere

By Jennifer Chiou

New York, Sept. 18 - Belvedere SA announced that hedge funds owning floating-rate notes have once more failed in their case against one of the company's Polish affiliates.

The company said that the outcome proves that it is within its rights regarding its plan of reorganization while assuring the proper treatment of its creditors.

This all follows the Court of the District of Krakow dismissing on July 10 a suit from the Bank of New York Mellon against a third Polish affiliate of the company. That time, the action involved Destylernia Polmos w Krakowie HIS and the Bank of New York Mellon representing hedge funds holding the floaters.

On Sept. 14, the Court of Dijon ruled that Belvedere must confer with its creditors on the company's plan of reorganization, adding that the next plan probate meeting is scheduled for Oct. 12.

The court is seeking clarification and details on certain plan aspects, the prior news release added.

On Sept. 11, the company issued a release in response to "unfounded allegations" of the Association des actionnaires minoritaires (ADAM). Belvedere stated that the treasury shares in question by ADAM are held by Belvedere Group and will, as a result, be denied voting rights at the next general meeting.

The company already said it never has intended to take voting rights into account for the aforementioned shares, despite ADAM's impression otherwise.

On June 30, the company said that the Court of Appeals of Dijon declared the Bank of New York Mellon's case against another of the company's Polish affiliates unfounded.

On June 16, also acting on account of its hedge funds, the bank requested the opening of a secondary procedure against Sobieski Polska, marking the second time that creditor claims from the bank against Belvedere had been rejected.

On May 26, the company announced that creditor claims brought by the Bank of New York Mellon against a different affiliate in Poland were rejected, and the bank had to pay legal expenses. The bank had requested a secondary procedure of insolvency against Fabryka Wódek Polmos HIS, though Belvedere previously reiterated that the creditors are not permitted to go through with any claims in Poland against the affiliates in that country.

The company had said it condemned any plans for a case in Poland and restated that these claims are inadmissible. On April 20, the company stated that the Bank of New York Mellon had not responded to the objection but was given 30 days to do so.

According to a prior communication to the president of the Court of Dijon, the company said that a letter from Sonier and Associates indicated the implementation of secondary procedures in Poland.

On April 16, the company said its plan of reorganization that was put into the courts on July 26, 2005 blocks creditor claims against the company and its MBRI French affiliate as well as its six Polish affiliates.

As already reported, the company announced on June 8 that it presented the revisions to its plan of reorganization to the Court of Commerce of Dijon, with the court signifying that the company's presentation satisfies improvement of the plan.

The Court of Dijon will rule on Sept. 14 on the proposed plan probate.

On March 16, the company said that its creditor trustee is notifying holders of the company's €375 million of floating-rate notes that their reorganization proceeding proofs of claim were not allowable because they did not comply with French law. As a result, the noteholders' claims will not be taken into consideration.

Based in Beaune, France, Belvedere is a producer and distributor of alcoholic and non-alcoholic beverages.

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