Restructuring plans and cram-down by creditors who are also the shareholders (Re Ambatovy Minerals Societe)
Restructuring & Insolvency analysis: The Plan Companies needed to rely on the shareholding Super Senior Lenders class as the assenting class to trigger the cram-down of the only dissenting class because the Super Senior Lenders were the only class with a genuine economic interest in the relevant alternative. Mr Justice Hildyard noted that it was an ‘arresting; feature’ of the Plan (at [104]) that the Super Senior Lenders were both the only available ‘cramming down’ class and the persons left, in their capacity as Shareholders, with the equity and the substantial part of any ‘restructuring surplus’. Although the Senior Lenders and the Recovery Financing Lenders no longer maintained this or any objection at the sanction hearing, it was still appropriate for the court to have that objection in mind. Mr Justice Hildyard ultimately decided this did not give rise to any unfairness in the circumstances and exercised the court’s cross-class cram down power under section 901G(1) of the Companies Act 2006 (CA 2006), sanctioning the Plans. Written by Sophie Waples, senior associate at A&O Shearman.