Jurisdiction(s):
United Kingdom

Re OutsideClinic Ltd: HMRC backs Part 26A restructuring plan; court addresses treatment of dissenting creditors and cross-class cram down where only one landlord attended (England and Wales)

Published on: 24 April 2025

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Re Outsideclinic Ltd [2025] EWHC 875 (Ch) What are the practical implications of this case?

This decision holds practical relevance for the mid-market. It illustrates that companies still striving to emerge from the COVID-19 pandemic, and unable to satisfy a familiar cohort of creditors—such as HMRC, a secured creditor, suppliers asserting proprietary rights in their stock, unsecured creditors and landlords—can, with rigorous financial scrutiny and analysis, demonstrate to their creditors and to the court that a restructuring plan may attract not only HMRC’s support (together with the majority of the other compromised creditors and the court), but HMRC’s vote in favour of the plan. The case is striking because HMRC used the sanction hearing to signal to companies in England and Wales a willingness, where appropriate, to back Restructuring Plans. It is of procedural interest to restructuring practitioners, since the sanction hearing generated debate over the court’s construction of who counts as dissenting creditors and, consequently, when the court is obliged to invoke CCCD. Finally, it is noteworthy that, from launch to sanction, the restructuring plan was sanctioned within nine weeks—a very swift turnaround from launch, highlighting how, with robust financial scrutiny and analysis, sanction can follow quickly indeed...

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