Jurisdiction(s):
United Kingdom

Landlords' AGA/GAGA rights survive Part 26A cross-class cram-down: Oceanfill v Nuffield Health (High Court, England and Wales)

Published on: 23 August 2022

Published by a LexisNexis Property Disputes expert

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Article summary

Oceanfill Ltd v Nuffield Health and Cannons Group Ltd [2022] EWHC 2178 (Ch)

What are the practical implications of this case?

This decision may offer reassurance to commercial landlords anxious about tenants attempting to cram down landlord claims under the new CA 2006, Pt 26A, especially after the High Court sanctioned the Virgin Active plan. Under Pt 26A—specifically CA 2006, s 901G—the court can approve a plan even where not all creditor classes support it, via a cross-class cram-down, provided at least one class has agreed and that no member would fare worse under the relevant alternative (ie the most likely outcome if the plan were not approved). For landlords holding AGAs—and it is worth reviewing historic title documents, as the AGA here dated back around twenty years—it is reassuring that such guarantees are not automatically stripped of value in exactly the circumstances where a landlord would expect to call on a guarantor for payment. That assurance does not necessarily extend to every other restructuring process, some of which (for example, IVAs) are regarded as...

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