Special Servicer Replacement Provisions Under The Microscope Again

Last year, we reported on the case of Titan Europe 2007-1 (NHP) v U.S. Bank and others¹, which considered, among other things, the issue of rating confirmations where a successor special servicer was being appointed and what would happen where a rating agency declined to give a confirmation. One year on, special servicer replacement provisions have been considered again in the case of Deutsche Trustee Company Limited v Cheyne Capital (Management) UK (LLP) and another².

The facts

The case concerned the Deco 15 – Pan Europe 6 Limited CMBS established in June 2007, where Deutsche had been appointed to act as Trustee and where Cheyne had been subsequently appointed to act as Operating Advisor to the most junior class of Noteholders. The Notes were rated by S&P, Fitch and Moody's.