In our last blogpost (here) we reported how the court had, for the first time, exercised its power under s. 901C(4) Companies Act 2006 to exclude a company’s members and all but one class of its creditors from voting on a restructuring plan under Part 26A. The facts of this case are set out in more detail in that blogpost.

Summary

For the first time, the court has exercised its power under s. 901C(4) Companies Act 2006 to exclude a company’s members and all but one class of its creditors from voting on a restructuring plan under Part 26A. The court was satisfied that only one class of creditors had a genuine economic interest in the company and noted that “this was not a marginal case”.

Key drivers for the court’s decision (see more detail below) were:

In August 2021, Sir Alistair Norris sanctioned the restructuring plan of Amicus Finance PLC (Amicus) (as we wrote about at the time). On 15 November 2021, the judge handed down his reasoning for sanctioning the plan.

Background

As part of the overall scaling down of the COVID-19 support provided to UK businesses, the UK government has announced changes to the regime for winding-up petitions, with effect from 1 October – withdrawing, at least in part, some of the protections currently afforded to businesses.

Current position

On 16 June 2021, the UK government announced that:

On 12 May 2021, in the first opposed cross-class cram down case, the English High Court sanctioned Virgin Active's restructuring plans, the first to bind landlords to lease compromises.

The decision

While the opposing landlords challenged the valuation evidence advanced by the companies, they did not advance evidence of their own. The court accepted the companies' evidence that:

On 17 May 2021, in the third of a trio of landlord challenge cases, the English High Court revoked Regis UK Limited's company voluntary arrangement (CVA) on one ground of unfair prejudice, but ruled against landlords seeking repayment of fees against the nominees.

The facts

On 10 May 2021, the English High Court rejected landlords’ challenge to the company voluntary arrangement (CVA) of fashion retailer, New Look. The New Look decision was the first in a trio of highly significant judgments focused on a distressed tenant's ability to compromise landlord's claims (our coverage of the Virgin Active and Regis decisions is available below).

The challenge

The landlords' challenge focused on jurisdiction, unfair prejudice and material irregularity as a result of the following:

On 20 January 2021, the UK High Court approved the convening of a single scheme meeting for certain aircraft lessors of MAB Leasing Limited (MABL) in relation its proposed UK scheme of arrangement. This is an important step towards the implementation of a wider restructuring for the Malaysia Airlines group, but may also have wider implications on the restructuring options available not only to airlines, but also to businesses with other leased assets, including real estate.

Lessors form a single class

As widely blogged about, on 26 June 2020 the Corporate Insolvency and Governance Act 2020 (the Act) came into force, introducing both far-reaching wholescale reforms to the UK’s restructuring toolbox as well as temporary measures dealing with COVID-19 impacts on companies. The two most significant temporary measures for companies facing financial difficulties as a result of the COVID 19 pandemic were: