Jurisdiction(s):
United Kingdom

Re Madagascar Oil (England and Wales): Part 26A cram‑across of pari passu creditor; revenue‑share consideration, new‑money rate post‑Petrofac, and Model Law recognition in Mauritius

Published on: 29 September 2025

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Re Madagascar Oil Limited [2025] EWHC 2129 (Ch) What are the practical implications of this case?

Madagascar Oil is poised to carry notable consequences for restructuring practitioners and insolvency litigators. First, it stands as a rare yet effective instance of a ‘cram across’, where an approving class was employed to force a plan on a dissenting class of equal priority, demonstrating that cross‑class imposition can still succeed in appropriate circumstances. Only one other ‘cram across’ has been recorded: Re Sino‑Ocean Group Holding Ltd [2025] EWHC 205 (Ch). Although Sino‑Ocean came before Petrofac, Madagascar Oil achieved a ‘cram across’ notwithstanding the significant constraints the Court of Appeal imposed on the cramdown jurisdiction. Second, the judgment shows that granting a dissenting creditor participation in future revenues, or alternative ‘synthetic equity’ within a plan, can evidence that the Plan distributes the gains of the restructuring fairly while permitting existing shareholders to retain some (or even all) of their equity. Structured in this way, a plan may allocate value credibly between stakeholders yet still allow shareholders to maintain continuity...

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