Jurisdiction(s):
United Kingdom

Key definition

Schemes of arrangement definition

What does Schemes of arrangement mean? A scheme of arrangement is a court‑supervised mechanism for compromising or arranging the rights of a company’s creditors or members (or any class of them), typically used to restructure debt, reorganise share capital or implement a takeover via a members’ scheme. In the UK, schemes are governed by Part 26 of the Companies Act 2006; in Ireland, by Part 9, Chapter 1 of the Companies Act 2014. Key features include: the court directing class meetings; class composition based on legal rights; approval by the statutory majorities in each class (including at least 75% in value of those present and...

Valuations in Schemes of Arrangement and Part 26A Restructuring Plans: Comparators, Methodologies and Judicial Approach to Where the Value Breaks and Creditor Recoveries

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

Why are valuations necessary?

Broadly, valuations for Schemes of arrangement or Part 26A restructuring plans serve to contrast projections of (i) what creditors and shareholders recover within the scheme/plan against (ii) the business value and associated recoveries if no scheme/plan proceeded. The setting and method of sale can profoundly influence proceeds or value achieved on disposal. Because sale routes differ, the realised figure may vary markedly. When delivering a valuation, a valuer must adopt assumptions about how and in what circumstances an imagined sale would take place, including the route to market, timing and prevailing conditions. Accordingly, valuation exercises typically weigh the expected distributions under the proposed scheme or plan against the counterfactual position were the scheme or plan not implemented. For schemes or restructuring plans—often concerning financially stressed companies that may otherwise enter administration or Liquidation—selecting the correct sales context or comparator is pivotal and, frequently, contentious...

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Web page updated on 22/05/2026

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