DSK Legal Mumbai partner Raksha Kothari advised The Bank of New York Mellon, which is acting as trustees in the unsecured foreign currency convertible bonds (FCCBs) held by a number of financial institutions.

The bondholders were represented by Juris Corp partner H Jayesh, who decided to file after Wockhardt did not repay the FCCBs after it was struck by a debt crisis.

DSK acted as counsel on record for the trustees instructing Dwarkadas on behalf of the bondholders to appear in the Bombay High Court winding up petition, which is understood to have been heard on five days over a one-month period.

Wockhardt instructed Majmudar & Co Mumbai partner Neerav Merchant who drafted senior counsel Kapadia to resist the winding up petition.

Last Friday (11 March), Justice SC Dharmadhikari admitted the petition with Wockhardt vowing to file an appeal.

It is understood that Wockhardt will wait until Dharmadhikari’s full order is available before any appeal filing.

This is not the first winding-up petition that has been filed by bondholders against defaulting companies in India, said one lawyer involved in the case.

Essar Steel noteholders for example filed a winding up petition against the company in 2002 and in 2009 Patni Financial Advisers filed a Madras High Court winding up order against Pyramid Saimira Theatre for not repaying a Rs 5 crore loan.

A winding up petition or order against a company could trigger cross-defaults in other contracts of the company, which increase the pressure on the company to satisfy the debt, explained the lawyer.

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