Following hot on the heels of the High Court rejecting Hayfin’s claims of underpayment of interest on the Class X notes in Hayfin Opal Luxco SARL v Windermere VII CMBS, the court yesterday also rejected claims by Credit Suisse Asset Management on its Class X notes in four Titan CMBS structures.

Although the outcome was the same, the judgment of the Chancellor of the High Court, Sir Terence Etherton in Credit Suisse Asset Management LLC v Titan Europe 2006-1 PLC and others is striking in the differences of approach to Mr Justice Snowden’s decision in the Windermere VII case. The Titan judgment is notable for a more commercially focused approach to the issues, whereas the Windermere decision is grounded in a close textual analysis of the structure, and in particular the cash flows into the transaction account. It is also striking that unlike Mr Justice Snowden the Chancellor was unwilling to be drawn into obiter comment on issues that were rendered moot by other aspects of his decision. He was also unwilling to give undue consideration of the Windermere decision itself for guidance on the similar, but not identical, Titan structures.

It appears inevitable that one or both of these landmark cases will be taken on to the Court of Appeal for the issues to be resolved at appellate level. In the meantime there is much for structured finance lawyers to learn from in the judgments. We will post a more detailed case note of the Titan judgment shortly.