Jurisdiction(s):
United Kingdom

SME Part 26A plan sanctioned; HMRC winding-up petition dismissed; CVA alternative confirmed; preferential debt compromised at 34.6p in the pound: Re DSTBTD Ltd (England and Wales)

Published on: 29 September 2025

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Re DSTBTD Ltd [2025] EWHC 2366 (Ch) What are the practical implications of this case?

This decision confirms that the Part 26A restructuring plan (Plan) continues to be available to SMEs. It demonstrates that a Plan can be deployed instead of a CVA where HMRC approval to a CVA is improbable. Here, the Plan secured a reduction of HMRC’s Preferential claim to roughly 34.6% of the amount originally owed. Engaging with HMRC early maximises the prospects of consent and also evidences to the court that HMRC have had adequate time to assess the Plan if they refuse and are to be crammed down. Despite HMRC’s participation, a winding-up petition may still be issued and must be managed during the Plan process, since there is no automatic moratorium when proposing a Plan.

What was the background?

A bold and expensive growth strategy left the Company with untenable debt. A sale of the Company and its restructuring could not resolve the substantial HMRC liabilities. HMRC were unlikely to approve a CVA. A Plan was...

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