Restructuring Plans

Restructuring Plans

Spurred on by the coronavirus (COVID-19) pandemic, the government pushed through the Corporate Insolvency and Governance Act 2020 (CIGA 2020).

Among the reforms, CIGA 2020, s 7 and Sch 9 introduced a Part 26A of the Companies Act 2006 (CA 2006)—Arrangements and Reconstructions for Companies in Financial Difficulty (an RP). In June 2022, the Government’s review concluded that the RP has largely met its objectives.

On 23 January 2024, the Court of Appeal handed down its decision in Re AGPS BondCo plc; sub nom Strategic Value Capital Solutions Master Fund LP v AGPS BondCo plc, setting aside the previous sanction order for the restructuring plan (though note that leave to appeal to the Supreme Court has been granted, but not pursued to date). Snowden LJ delivered the leading judgment (with which Nugee LJ and Sir Nicholas Patten agreed) and held that the RP was unfair because it was contrary to the pari passu principle. Snowden LJ gives guidance on many aspects of RPs including (among other things): time-tabling, classes, fair allocation of the restructuring surplus, how cross class cramdown (CCCD) should be applied

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Latest Restructuring & Insolvency News

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Directors’ liability for company’s debts under section 217 of the Insolvency Act 1986 and rule 22.17 of the Insolvency Rules 2016 (Maxima v Fealy and Barrett)

Restructuring & Insolvency analysis: The High Court has dismissed a claim brought by an assignee of creditors' debts against individuals who were directors of a company in liquidation and a second company which was operating under a prohibited name pursuant to section 216 of the Insolvency Act 1986 (IA 1986). The defendants successfully argued that the second company fell within ‘The Third Excepted Case’ under the Insolvency Rules 2016 (IR 2016), SI 2016/1024, r 22.7, and that the second company had been known by its name for the entire 12 months prior to the first company's liquidation and had not at any time in those 12 months been dormant. The case is thought to be the only reported case on the true meaning and effect of the second of the two elements of The Third Excepted Case and demonstrates that the principles of corporate accounting law on non-dormancy cannot be translated from an accounting to an insolvency scenario. The concept of phoenix syndrome and the principle against doubtful penalisation were also considered. Written by Laura Newbery, legal director at Addleshaw Goddard LLP.

Top UK court rejects Bedzhamov Russian bankruptcy order

Law360, London: The UK Supreme Court refused on 20 November 2024 to recognise a Russian bankruptcy order against two properties owned by banker Georgy Ivanovich Bedzhamov in Britain, confirming a legal principle that foreign courts do not have jurisdiction over English land.

Restructuring & Insolvency weekly highlights—21 November 2024

This week's edition of Restructuring & Insolvency weekly highlights includes: confirmation by the Supreme Court of the immovables rule to English property (Kireeva v Bedzhamov), the publication by the Insolvency Service of its monthly insolvency statistics for October 2024, an analysis on the interface between property law and financial remedy in the context of bankruptcy (DDR v BDR), plus a round-up of other news and cases for restructuring and insolvency professionals.

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