Jurisdiction(s):
United Kingdom

High Court (Chancery Division, England and Wales) sanctions modified scheme after condition precedent fails: court’s power to approve non-material post-meeting changes in Re PlusHolding GmbH

Published on: 03 May 2024

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

What are the practical implications of this case?

This case’s practical significance lies in the court having to sanction the scheme in an altered form when, after the creditors’ meeting, it emerged that a condition precedent could not be met. The court observed that the resolution presented to, and passed by, the scheme creditors was to approve the scheme subject to whatever modification, addition or condition the court might approve or impose. Both the original and amended schemes also contained a variation provision stating, in substance, that the Company may, at any Sanction Hearing and, where reasonably practicable following consultation with the Ad Hoc Committee’s advisers, give consent on behalf of all Scheme Creditors to any change to, or augmentation of, the Scheme, or to any terms or conditions the Court considers appropriate to approve or impose, provided such change would not, directly or indirectly, have a material adverse impact on any Scheme Creditor’s interests under the Scheme. In short, both the creditors’ resolution and the schemes themselves expressly contemplated and permitted court-approved changes, additions and conditions of this nature...

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