British Energy takes Polygon Investment Partners to court to stymie Polygon demand for meeting

By Jeff Pines

Washington, Sept. 21 - British Energy plc sued Polygon Investment Partners LLP in an attempt to force Polygon to withdraw its demand for an extraordinary shareholders' meeting.

British Energy alleges London-based Polygon's SC 13-D filed with the Securities and Exchange Commission is defective because Polygon waited until Sept. 13 to file its 6% stake in the nuclear power company. British Energy said that because Polygon waited to file its 13-D, it should be forced to withdraw its SC 13-D and refile.

If the judge rules against Polygon, its request for a meeting would be withdrawn.

British Energy also warned that if the resolutions proposed by Polygon are passed then it would be prevented from taking action needed to comply with its restructuring agreement. That in turn would result in £1.5 billion of debt coming immediately due, British Energy said, adding that it "has nothing like the available resources to pay these sums."

According to the SC 13-D filed with the SEC on Sept. 13, Polygon acquired 35 million ordinary shares on July 23, 100 American Depositary Shares, each representing 75 ordinary shares, on July 29 and 2 million ordinary shares on Sept. 3.

Polygon said it approached British Energy with an alternative restructuring proposal, but the company rebuffed it. On Sept. 3, Polygon asked British Energy to call an extraordinary general meeting of its shareholders to consider various resolutions about the company's business and its restructuring agreement that would leave shareholders with a very small stake in the company.

Polygon also said it is trying to create an ad hoc committee of shareholders.

Another major shareholder who has asked for an extraordinary meeting is a group led by Brandes Investment Partners Inc. It holds more than a 10% stake in British Energy.

Brandes has not made any statements since its letter was delivered to British Energy on Sept. 6.

British Energy has said if it cannot implement its restructuring it will have to file for bankruptcy.

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