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Differences between restructuring plans, schemes of arrangement, and CVAs

Differences between restructuring plans, schemes of arrangement, and CVAs Part 26A restructuring plans The Corporate Insolvency and Governance Act 2020 (CIGA 2020) introduced a new restructuring tool, namely a Part 26A restructuring plan. Consultation responses and discussions with stakeholders persuaded the government of the benefits of modelling the restructuring plan procedure on that of schemes of arrangements. As well as familiarity, this had the advantage of providing a long-established and tested body of jurisprudence that courts are able to draw upon when dealing with certain aspects of restructuring plans and considering matters such as class formation (ie relevant scheme case law is applicable to certain provisions of the new restructuring plan procedure, see: Schemes of arrangement—overview). CIGA 2020 introduced a restructuring procedure that allows a company to bind all creditors or members, including junior (or senior) classes of creditors even if they vote against the plan, through the use of a cross-class cram down (CCCD) provision if certain conditions are satisfied (see Practice Note: Cross-Class Cram Down under a Part...

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Part 26A Restructuring plans—an introductory guide

Part 26A Restructuring plans—an introductory guide Practical implications of a restructuring plan The Corporate Insolvency and Governance Act 2020 (CIGA 2020) introduced a restructuring procedure that allows a company to bind all creditors/members, including junior (or senior) classes of creditors even if they vote against the plan, through the use of a cross-class cram down (CCCD) provision. Such cram down can be imposed provided that dissenting classes of creditors are no worse off than they would be in the relevant alternative and other conditions are satisfied. For more information, see Practice Note: Cross-Class Cram Down under a Part 26A restructuring plan. The classes of creditors will be proposed by the plan proponent on a case by case basis. For a class to vote in favour, 75% of a class by value must agree to the plan. For more detail on all RPs sanctioned to date, see Practice Note: Part 26A restructuring plan deal debriefs. Process The process for a Part 26A restructuring plan largely mirrors that used in schemes. For...

Restructuring plans collection—CRI and JIBFL articles

Restructuring plans collection—CRI and JIBFL articles Relevant articles The Corporate Rescue and Insolvency and Journal of International Banking and Finance Law journals include many useful articles on Part 26A restructuring plans for restructuring & insolvency lawyers which can be linked to from this page. These articles are only available to Lexis®Library subscribers. Date Article Brief description of article 1 June 2025 Structural considerations for Pt 26A restructuring plans and ½Û×ÓÊÓƵ' Pt 26A Trend Report: (2025) 3 CRI 83 The Part 26A restructuring plan tool allows for creative and diverse structuring to facilitate corporate rescues, with several successful examples demonstrated. However, some structures carry risks, which were addressed in the Court of Appeal's decision in Kington S.A.R.L. v Thames Water Utilities Holdings Ltd [2025] EWCA Civ 475. The ½Û×ÓÊÓƵ® Trend Report analyses plans considered in 2024, including their structures and key developments. Written by Kathy Stones, professional support lawyer at Lexis+® UK. 1 June 2025 To release or not to release: recent trends in restructuring releases...

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Restructuring and Insolvency weekly highlights—1 May 2025

This week's edition of Restructuring and Insolvency weekly highlights includes: the appointment of R3’s new president, Tom Russell, an analysis of the restructuring plan (RP) involving HMRC sanctioned for OutsideClinic Ltd, updated guidance for insolvency practitioners (IPs) dealing with regulated firms from the Financial Conduct Authority (FCA), plus a round-up of other news and cases for restructuring and insolvency professionals.

Restructuring Plan sanctioned for OutsideClinic Ltd (Re Outsideclinic Ltd)

Restructuring & Insolvency analysis: On 28 March 2025, the High Court of Justice sanctioned a restructuring plan proposed by OutsideClinic Ltd binding on seven classes of creditor, including HMRC in its capacity as a preferential creditor. Five of the seven classes of creditors voted in favour of the restructuring plan at the plan meetings. The sixth creditor abstained from voting and of the creditors in the seventh category (four in total), only one creditor holding 83% by value of the creditors in this category attended and voted prompting an interesting debate as to what constitutes a dissenting creditor and when cross class cram down (CCCD) should be invoked. This case also sent a key message to companies looking to compromise preferential debt due to HMRC by way of a restructuring plan, which is that, in the appropriate circumstances, HMRC is prepared to support, and vote in favour of restructuring plans. Written by Hannah Gaskell, principal associate, and Sarah Teal, partner & head of Manchester Office at Shoosmiths LLP (Shoosmiths LLP...