Court sanction hearing meaning

Practice Statement (Companies: Schemes of Arrangement under Part 26 and Part 26A of the Companies Act 2006) (Practice Statement 2020) Where a company puts forward a restructuring plan to creditors, the Practice Statement 2020 requires it to take every reasonably available step to alert any person affected that the plan is being advanced, explain the aim it seeks to achieve, and outline the creditor meetings the applicant considers will be required and how they are constituted, unless there is proper justification for not doing so (a consultation began in May 2025 intending to replace this Practice Statement by the end of July 2025; see: LNB News 09/05/2025 46). This notification is typically given by sending a practice statement letter to creditors ahead of the convening hearing. What amounts to sufficient notice of the convening hearing turns on the particular facts and circumstances (Practice Statement 2020, para 7) and is a highly fact‑sensitive inquiry (see Re PizzaExpress (convening)). In practical terms, the length of notice likely required may depend on:...

Re Sino-Ocean Group Holding Ltd [2025] EWHC 205 (Ch) What are the practical implications of this case? The practical implications of this judgment are: Questions about how a voting class is constituted or composed should, preferably, be aired at the convening hearing, not deferred to the sanction hearing. A dissenting creditor cannot simply contend that liquidation or any other ‘relevant alternative’ advanced by the plan company is not the relevant alternative for Condition A; they must also identify a specific alternative. It is not abusive for a plan company to include a consenting class within a plan, even if this enables a cross‑class cram down, provided the plan has a meaningful effect on that assenting class. When assessing any challenge to whether a special interest creditor’s vote is representative, the court will proceed flexibly rather than apply a rigid “but for” test, and will principally ask whether that creditor voted with the class’s interests in view. Any plan that involves a debt‑for‑equity...

Re Outsideclinic Ltd [2025] EWHC 875 (Ch) What are the practical implications of this case? This decision holds practical relevance for the mid-market. It illustrates that companies still striving to emerge from the COVID-19 pandemic, and unable to satisfy a familiar cohort of creditors—such as HMRC, a secured creditor, suppliers asserting proprietary rights in their stock, unsecured creditors and landlords—can, with rigorous financial scrutiny and analysis, demonstrate to their creditors and to the court that a restructuring plan may attract not only HMRC’s support (together with the majority of the other compromised creditors and the court), but HMRC’s vote in favour of the plan. The case is striking because HMRC used the sanction hearing to signal to companies in England and Wales a willingness, where appropriate, to back Restructuring Plans. It is of procedural interest to restructuring practitioners, since the sanction hearing generated debate over the court’s construction of who counts as dissenting creditors and, consequently, when the court is obliged to invoke CCCD. Finally, it is noteworthy that,...

Re Wealthtek LLP (in special administration) [2024] EWHC 2520 (Ch) What are the practical implications of this case? The ruling identifies the issues likely to preoccupy the court in detail when asked by Special Administrators to sanction a proposed distribution plan in situations where returning client assets strictly in line with clients’ legal entitlements cannot, in practice, be achieved. It underscores the obligation on Special Administrators to share the fullest possible and relevant information with the bank’s customers and with the court, especially where clients lack separate legal representation at the hearing. The court in fact allowed additional time to expressly safeguard clients’ interests through the engagement of independent counsel, even though that appointment was made by the Special Administrators. The court also observed that, had more time been available, it would have been better for such counsel to be instructed by a representative client or by the Committee. Rajah J stressed that judicial approval of a distribution plan is a central protection of client interests under the IBSA...

Dobbies Garden Centres Limited sought a Part 26A restructuring plan at a convening hearing in October 2024 and a sanction hearing in December 2024 before the Scottish Outer House, Court of Session. The key headline points are set out below (capitalised terms not defined here have the meanings given in the sanction judgment). This Deal Debrief forms part of our Restructuring plans collection. For an in‑depth analysis of key metrics from RPs filed in England & Wales in 2023, together with commentary from leading figures in the restructuring sphere, see Practice Note: Market Insights Trend Report—trends in Part 26A restructuring plans in 2023 [Archived]. Name of plan company Dobbies Garden Centres Limited (the Company) Industry sector Garden centres Place of debtor’s incorporation and jurisdictional factors The Company was incorporated in Scotland and its centre of main interests (COMI) was in Scotland. Legal counsel involved The Company: Almira Delibegovic-Broome KC and Elisabeth Roxburgh (instructed by Burness Paull LLP and Macfarlanes LLP) Timeline...

Hurricane Energy PLC sought approval for a Part 26A restructuring plan (RP), put to the court at a convening hearing in May 2021 and a sanction hearing in June 2021. The court, however, declined to sanction the RP. Highlights are set out below (capitalised expressions not otherwise defined adopt meanings in the convening and sanction judgments). This Deal Debrief sits within our Restructuring plans collection. For a review of metrics from RPs lodged in 2023 and insights from figures in the restructuring community, consult Practice Note: Market Insights Trend Report—trends in Part 26A restructuring plans in 2023 [Archived]...

Three companies in the DeepOcean Group applied for three Part 26A restructuring plans (RP), with a convening hearing in December 2020 and a sanction hearing in January 2021. The principal points are outlined below (capitalised terms not otherwise defined take the meanings given in the convening and sanction judgments). This Deal Debrief sits within our Restructuring plans collection. For an in-depth review of key metrics from the RPs filed in 2023 and commentary from leading figures in the restructuring world, refer to Practice Note: Market Insights Trend Report—trends in Part 26A restructuring plans in 2023 [Archived]. Name of plan companies DeepOcean I Ltd (DO1) DeepOcean Subsea Cables Ltd (DSC) Enshore Subsea Ltd (ES) Together, the Plan Companies. Industry sector Subsea construction work Place of debtors’ incorporation and jurisdictional factors Each of the Plan Companies is incorporated in England & Wales and has its COMI in the UK...

IN THE HIGH COURT OF JUSTICE Business and Property Courts of England and Wales at [insert location], Insolvency and Companies List (ChD); or in the County Court at [insert location], Business and Property Courts List; or in the High Court of Justice, Chancery Division. Claim No: [No.] of [insert year] Claimant In the matter of [insert name of company] and in the matter of Part 26 of the Companies Act 2006 Defendant(s) Does this claim involve any issues under the Human Rights Act 1998? [Yes or No] Defendant’s name and address Details of claim (see also overleaf) A. The above company (the Applicant) seeks the following orders and directions: An order sanctioning a scheme of arrangement (the Scheme) under section 899(1) of the Companies Act 2006, provided the Scheme has been approved by the requisite creditor majorities; Upon such approval, that the application to sanction the Scheme be listed for hearing before a Judge of the Chancery...