Jurisdiction(s):
United Kingdom

Re Browne and others: England and Wales court convenes single creditors' meeting for VTB sanctions scheme; confirms schemes may modify IR 2016 and minimal rights differences need not fracture classes

Published on: 13 August 2024

Published by a LexisNexis Restructuring & Insolvency expert

Legal News

Article summary

Re Browne and others [2024] EWHC 1777 (Ch)

What are the practical implications of this case?

In this decision, the court examined two matters of practical significance for parties and advisers contemplating a scheme of arrangement:

it affirmed its jurisdiction to sanction a scheme that applies the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 in a modified form. This is a well-established use of the scheme jurisdiction and is commonly encountered in practice; for example, a scheme might set a cut-off for claims and/or adopt an alternative adjudication route
it also held that, although creditors could hold different rights owing to the proposed treatment of their claims under the scheme, the class was not splintered because any disparity in amounts paid to creditors was expected to be modest in practice overall

The evaluation of creditor outcomes will always be fact-specific, but the principle endures that differences in rights do not inevitably fracture a class in any given case, ultimately.

What was the background?

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