Published May 2021
Authors
Stephen Robins KC
Charlotte Cooke
- Or members (if applicable).
- The earlier cases were Re Virgin Atlantic Airways Ltd (see the convening judgment of Trower J [2020] EWHC 2191 (Ch) and the sanction judgment of Snowden J [2020] EWHC 2376 (Ch), both reported at [2020] BCC 997) and Re PizzaExpress Financing 2 plc (see the convening judgment of Sir Alastair Norris [2020] EWHC 2873 (Ch). The sanction judgment has not yet been released).
- Certain claims including employee claims, tax claims and intercompany claims were excluded.
- A bar date was similarly set in the Noble Group scheme of arrangement: [2019] BCC 349.
- See Article 67 of the Withdrawal Agreement.
- However, note the more recent decision in Gategroup Guarantee Limited: [2021] EWHC 304 (Ch) where Zacaroli J held that restructuring plans fall within the bankruptcy exception in Article 1(2)(b) of the Lugano Convention.
- There is nothing unjust or unfair to junior creditors in that approach. A similar technique was deployed in Re Tea Corp [1904] 1 Ch 12 and has been deployed in numerous subsequent schemes such as Re MyTravel [2005] 1 WLR 2365.
- Trower J noted (at [51]): “One aspect of this incremental development is that Part 26A has introduced an ability to bind a dissenting class where they have an economic interest in the company and are not therefore out of the money in the relevant alternative. However, where the evidence is that the members of the dissenting class are out of the money in the relevant alternative, and that their exclusion would in any event have been achievable if a Part 26 scheme had been proposed, it seems to me that their receipt of any benefits under the terms of the proposed Restructuring Plan means that they are unlikely to have been treated in a manner that is not just and equitable. Indeed, in such a case, section 901C(4) means that it may not have been necessary for such creditors to be summoned to a class meeting in the first place.”
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