Cross Class Cram Down (CCCD) meaning

Part 26A restructuring plans The Corporate Insolvency and Governance Act 2020 (CIGA 2020) unveiled a fresh restructuring mechanism: the Part 26A restructuring plan. Following consultation and dialogue with stakeholders, the government opted to pattern the process on schemes of arrangement. Beyond its familiarity, this approach delivers the benefit of a well‑developed, tested body of case law to guide the courts on key features of restructuring plans, including class constitution (with established scheme jurisprudence applying to aspects of the new regime-see Schemes of arrangement-overview). Under CIGA 2020, a company may bind all creditors or members-junior as well as senior-even where a class votes against, by deploying a cross‑class cram down (CCCD) where specified conditions are fulfilled (see Practice Note: Cross‑Class Cram Down under a Part 26A restructuring plan). The applicant will propose the relevant creditor/member classes on a case‑by‑case basis. For any class to approve, at least 75% in value of that class must support the plan. Importantly, a restructuring plan can...

The below tables provide an overview of: various factors that do not necessitate distinct classes (ie do not split the class) various factors that have been treated as warranting distinct classes (ie do split the class) in Part 26 scheme and Part 26A restructuring plan cases Judges have held that the caselaw on schemes is equally applicable to restructuring plans on many issues (see Re PizzaExpress (convening) and Re Virgin Atlantic), including class formation, although the Court of Appeal in Adler confirms that cross-class cramdown (CCCD) in restructuring plans does require different considerations; see Practice Note: Cross-Class Cram Down under a Part 26A restructuring plan. As a note of caution, it is important to recognise that class analysis is highly fact-specific, and it is possible that another judge, faced with a slightly different factual pattern, might reach a different conclusion to that set out below on the particular facts presented. For a detailed analysis of key metrics from the RPs filed...

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,...

What does the Market Insights Trend Report cover? Click below to download the complete report in PDF form. The Market Insights Trend Report offers an in-depth review of the 14 RPs proposed in the UK in 2023. It shares insights on trends and what we, together with our contributors, expect to unfold in 2024 and beyond. Areas examined include: outlook for 2024 place of incorporation industry sectors classes of creditor relevant alternatives challenges use of cross-class cramdown (CCCD) foreign law expert opinions sought on recognition legal developments in 2023 The report also sets out metrics for RPs including Fitness First, Prezzo and Adler (AGPS Bondco). What are the highlights from the report?...

Part 26A restructuring plan (RP) The Corporate Insolvency and Governance Act 2020 brought in Part 26A of the Companies Act 2006 (CA 2006), establishing a new restructuring mechanism-the Part 26A restructuring plan (RP)-with effect from 26 June 2020. This framework is underpinned by the relevant Practice Statement (see Practice Note: The Practice Statement for Part 26 schemes and Part 26A restructuring plans (2025)) and the Explanatory Notes issued by the Department for Business, Energy and Industrial Strategy (now known as the Department for Business and Trade) (which are admissible as an interpretative aid without the need to show that the statute is ambiguous or unclear per Snowden J in Re Virgin Atlantic Airways applying Re Flora v Wakom (Heathrow) Ltd). The landmark Court of Appeal ruling, Strategic Value Capital Solutions Master Fund LP v AGPS BondCo plc (referred to here as Adler), provides significant guidance on deploying the cross-class cram down (CCCD) power (see News Analysis: Adler appeal-restructuring plan sanction order overturned (Re AGPS Bondco plc))...

Potential grounds for challenge Since the advent of Part 26A of the Companies Act 2006 (CA 2006), numerous restructuring plans (RPs) have been contested by dissenting creditors or shareholders/members. That is hardly unexpected: a core attribute of the RP is that, where the relevant criteria are met, the court may deploy cross-class cram down (CCCD) against a dissenting class (see Practice Note: Cross-Class Cram Down under a Part 26A restructuring plan). It is therefore very likely that objections to future RPs will continue. Because the RP is a highly adaptable mechanism, giving wide latitude to those crafting it, the grounds for challenge will differ markedly according to how the particular plan is framed and the surrounding facts, especially the events leading up to the start of the court process to seek sanction. Full coverage of the challenges advanced in all RPs heard so far is available in our Deal Debrief series (see Practice Note: Part 26A restructuring plan deal debriefs)...

Since 26 June 2020, companies have been able to use Part 26A restructuring plans under the Corporate Insolvency and Governance Act 2020 (CIGA 2020). Implementation is underpinned by the applicable Practice Statement (see Practice Note: The Practice Statement for Part 26 schemes and Part 26A restructuring plans (2025)) and by Explanatory Notes issued by the Department for Business, Energy and Industrial Strategy (now the Department for Business and Trade). These provisions represent a permanent reform of the UK’s restructuring and insolvency regime and a valuable addition to its toolkit. What are the practical implications? The Part 26A restructuring plan equips distressed, yet fundamentally viable, businesses with the means to pursue a rescue. It enables a company to bind all creditor classes-junior as well as senior-even where they vote against, by deploying the cross-class cram down (CCCD) mechanism. The court may impose that cram down so long as dissenting classes are not worse off than in the relevant alternative (see Practice Note: Cross-Class Cram Down under a Part 26A...