Part 26A restructuring plan or restructuring plan meaning

HMRC guidance on compromises using Part 26 schemes and Part 26A restructuring plans In corporate insolvencies, HMRC commonly ranks as a secondary preferential and/or unsecured creditor (see Practice Note: Waterfall of payments—a comparative guide), a status that often serves as the relevant comparator or alternative to a Part 26 scheme or a Part 26A restructuring plan. On 1 November 2023, HMRC issued guidance covering compromises under Part 26 schemes (see: Schemes of arrangement—overview) and Part 26A restructuring plans (see: Restructuring plan—overview) (see: HMRC publishes guidance on using debt management schemes to restructure finances—LNB News 15/11/2023 13). Practitioners should take account of this guidance whenever a proposed scheme/plan includes HMRC as a creditor. HMRC will only back a restructuring where it considers there is a realistic prospect of success. If HMRC does not consider success realistic, it will engage with the scheme/plan proponent to explore other means of repaying HMRC’s debt, which may involve a formal insolvency process. The debtor must have submitted all outstanding...

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...

Restructuring & Insolvency weekly highlights—29 August 2024 In this issue: Corporate insolvency processes Restructuring Personal insolvency Directors and insolvency Daily and weekly news alerts Corporate Rescue and Insolvency (August 2024 edition) New Q&A Corporate insolvency processes Company’s register of members | Conclusive or not for voting rights? (Bland v Keegan) In proceedings relating to JDK Construction Ltd (JDK), the Court of Appeal examined a challenge to the lawfulness of a written resolution appointing joint liquidators, alongside allegations of an unauthorised share transfer form. The Appellant argued her shares in JDK were wrongfully transferred, rendering the liquidators’ appointment invalid. The key question was whether the company’s register of members—recording her shares as transferred—was determinative for validating the members’ resolution. Affirming the decision of His Honour Judge Hodge KC, the Court of Appeal held that the register stands as prima facie evidence of who the members are and of the validity of resolutions passed by them, unless...

Petrofac Ltd [2025] EWHC 2887 (Ch) What was the background? Petrofac Ltd (the Company) is a Jersey-incorporated entity, headquartered in London, that functions as the holding company of the Petrofac Group. Its operations comprise owning shares in subsidiaries, delivering management services, and making loans to other Petrofac Group members. Confronted with financial difficulties, in late 2024 the Company promoted a restructuring plan under Part 26A of the Companies Act 2006 (the Part 26A plan). Although sanctioned at first instance, dissenting creditors appealed and the Court of Appeal set aside the sanction order. In the wake of that ruling, the Company assessed the feasibility of a business disposal or raising further capital, which evolved into a proposal for senior creditors to acquire the business via a pre-pack administration. Those workstreams progressed in tandem with an application for permission to appeal to the Supreme Court; permission was ultimately refused on the basis that the Company had reached an agreement in principle on an alternative restructuring proposal. The landscape then changed...

Restructuring & Insolvency weekly highlights—26 September 2024 In this issue: Key R&I law developments Corporate insolvency processes Personal insolvency Financial institutions International restructuring and insolvency Daily and weekly news alerts Key dates for R&I professionals New content Key R&I law developments The Insolvency Service has released its monthly statistics for August 2024 on corporate and personal insolvencies in England and Wales. There were 1,953 company insolvencies—9% fewer than July 2024 and 15% down on August 2023. Individual insolvencies stood at 10,000, a 5% fall from July 2024 but 16% higher than August 2023. See: LNB News 20/09/2024 28. Corporate insolvency processes The Insolvency Proceedings (Fees) (Amendment) Order 2024, SI 2024/963, updates the Insolvency Proceedings (Fees) Order 2016, SI 2016/692. Taking effect on 9 January 2025, it will, among other changes, increase: (i) the official receiver’s administration fee payable to the Secretary of State; and (ii) the official receiver’s general fee, payable to the...

Formulating an informal restructuring plan An informal restructuring may blend out-of-court measures with formal mechanisms to bind objecting parties, such as: schemes of arrangement Part 26A restructuring plan (see Practice Note: Part 26A restructuring plans: history, rationale and scope) pre-pack administrations company voluntary arrangements (CVAs) US Chapter 11 proceedings Informal restructuring rationale Once a valuation of the company or group has been secured that identifies where the value breaks (see Practice Note: Where the value breaks and negotiating strength), it becomes apparent who genuinely has a seat at the negotiating table, and dissenters typically surface, often challenging the valuation itself. Where those dissenters sit near the value break, and the creditors who are in the money refuse to offer a small equity stake in the restructured entity or another incentive to win consent to an informal approach, parties often turn to one of the more formal routes...

ARCHIVED : This Practice Note is archived and no longer maintained. For 2024 scheme/plan hearing dates, see Practice Note: Tracker of Part 26 scheme/Part 26A restructuring plan hearing dates 2024. This Practice Note captures key hearing dates featured in the High Court, Insolvency and Companies Court (Chancery Division) daily cause list from 13 September 2022 onwards, shown with the most recent first, for: Part 26 schemes of arrangement, typically solvent schemes; generally internal corporate reorganisations, take-over or merger schemes Part 26 schemes of arrangement, creditor/member schemes (see: Schemes of arrangement—overview) Part 26A restructuring plans (see Practice Note: Part 26A restructuring plans: history, rationale and scope) Part VII transfer schemes: insurance business transfer schemes under Part VII of the Financial Services and Markets Act 2000 (see Practice Note: Insurance business transfer schemes) It is notable that the majority of the hearings listed below concern solvent schemes of arrangement for internal corporate reorganisations, take-over or merger schemes (for further details, see...

Courts have concluded that case law on schemes is equally relevant to restructuring plans on certain matters (see Re PizzaExpress (convening) and Re Virgin Atlantic), including lock-up arrangements and consent fees, albeit different considerations may arise where cross-class cramdown (CCCD) is invoked. For a fuller review of key metrics from RPs filed in 2024—such as the quantum of any consent fee—and commentary from leading figures in the restructuring sphere, see News Analysis: Market Insights Trend Report—trends in Part 26A restructuring plans in 2024... Timing In most instances, there is unlikely to be a class issue where a company advancing a scheme or restructuring plan enters into an agreement with creditors to vote in favour of it (ie a lock-up agreement) (see Re Telewest Communications) or secures an irrevocable undertaking to approve it (see Re Vietnam Shipbuilding Industry Group) in return for a fee, provided the offer is made to all creditors. This is subject to the following principles: any payment made under the voting arrangement...

1 Introduction At [ insert the exact time ], I declare open the meeting of Creditors/Members of [ insert name of the company ] [ with [ insert type of claim ] claims, and the meeting of Creditors/Members of [ insert name of the company ] with [ insert type of claim ] Claims ]. I am [ insert name ], of [ insert firm or company name ], acting as [ insert details of who the chairperson is eg adviser etc ]. The Meeting [ s ] taking place today [ has OR have ] been convened by the Company pursuant to an Order of the High Court of Justice of England & Wales made on [ insert date ]. The purpose of the Meeting [ s ] is to review and, if considered appropriate, approve the Restructuring Plan(s) under Part 26A of the Companies Act 2006 that the Company proposes to enter into with [ certain of ] its creditors/members. Pursuant to the...

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES COMPANIES LIST (CHD) IN THE MATTER OF [ insert name of the Company ] AND OF THE COMPANIES ACT 2006 BETWEEN [ insert name of the Company ] and the Plan Creditors [ and Members ] (each as defined herein) RESTRUCTURING PLAN (pursuant to Part 26A of the Companies Act 2006) DATED [ insert date ] RECITALS The Company (A) [ Insert name of the Company ] is a [ private ] limited company, registered in [ England and Wales ], bearing company number [ insert company number ] and with its registered office at [ insert address ] (the Company). Purpose of the Restructuring Plan (B) This Restructuring Plan seeks to implement a compromise and arrangement between: [ (i) ] the Company and the Plan Creditors; [ and (ii) the Company and the Members ], so as to remove, lessen, avert, or alleviate the impact of financial difficulties experienced [...

For the Applicant By: [ insert name ] Statement Number 1 Exhibits: [ insert details ] Date: [ insert date ] Filed: [ insert date ] Court Reference No: [ INSERT COURT REF. NUMBER ] [ IN THE HIGH COURT OF JUSTICE ] [ BUSINESS AND PROPERTY COURTS ] [ OF ENGLAND AND WALES ] OR IN [ insert location ] OR THE COUNTY COURT AT [ insert location ] [ BUSINESS AND PROPERTY COURTS LIST ] In the matter of [ insert company name ] And in the matter of the Companies Act 2006 Statement of [ Insert full name ] I, [ Insert full name ], of [ insert firm/company name ] at [ insert address ], state as follows: I hold the role of [ insert role/job title eg licensed insolvency practitioner and Fellow of the Institute of Chartered Accountants of England and Wales ] within the firm of [ insert firm/company name...