‘Gifting’ is good law and other firsts – Judgment hand-down in significant restructuring of NASDAQ-listed crypto miner

The Plan appears to be the first ‘direct’ restructuring of a Nasdaq-listed company using an RP or creditor scheme of arrangement and the first crypto-related restructuring in the UK, the first retail plan to be sanctioned since Petrofac, and one of the first bondholder schemes to be sanctioned since then.

Hildyard J’s full written judgment is highly significant for those in the UK restructuring market. The judgment establishes several novel points of law and clarifies a number of areas of uncertainty created by Petrofac, including the following:

• • The ‘gifting’ principle developed in Tea Corporation and Virgin Active remains good law post-Petrofac, though the class entitled to make a ‘gift’ of the restructuring benefit to others is the class which contributes the greatest share of that benefit and not (as before) those out of the money in the RA. The gifting principle may (as in Argo) reduce the scope for dissenters to complain that the classes ‘driving’ a restructuring are taking the lion’s share of the benefit, or that other subordinate classes are benefitting unfairly from the plan.
  • Hildyard J also held that where a class is an assenting class but the turnout at the meetings was extremely low, it was necessary for the Court not just to apply the rationality test but to be satisfied that the power to ‘cram down’ would have been exercised, had the class dissented. On the facts, Hildyard J was satisfied that it was appropriate to do so.
  • The Judge also agreed with the approach adopted by the Company to valuing the ‘contribution’ attributable to each class, which attributed a ‘definite’ value to asset contributions and allocated the remaining restructuring benefit based on the level of debt written off by each class. This will be of significant interest to all those proposing bondholder plans (retail or non-retail)
  • The Judgment considered whether a class ‘meeting’ involving only the Chairperson, voting as proxy for multiple members of the class, is a ‘meeting’ within the meaning of section 901F of the Companies Act 2006. Disagreeing with the decision of the Scots courts in Re Dobbies Garden Centres, Hildyard J said (obiter) that this scenario does not involve a properly constituted meeting
  • Hildyard J also made detailed and helpful observations about the role and terms of engagement of Retail Advocates in schemes and plans, particularly where the cramdown power is proposed to be employed, which will be essential reading for all those involved in formulating plans involving ‘retail’ participants
  • In both the convening and sanction judgments, Hildyard J considered further points of law and practice of interest to those restructuring NASDAQ listed companies, including the extent to which American Depository Share (ADS) holders and holders of ordinary shares can be ‘classed’ together, whether doing so gives rise to fairness issues, issues relating to the conversion of shares to ADSs, and the nature of evidence required in relation to section 3(a)(10) of the US Securities Act of 1933
  • A further point of wider interest to the international restructuring community is Hildyard J’s discussion of the parallel determination of the NASDAQ Hearings Panel on 11 November 2025 that a Part 26A plan does not constitute either a ‘bankruptcy’ or a ‘business combination’ under NASDAQ’s rules, either of which would have caused the Company to have been delisted – and thereby defeated a key goal of the Plan. Given that (a) a restructuring under Chapter 11 would have led to NASDAQ delisting; but (b) a Part 26A plan may subsequently be recognised under Chapter 15, the ability to preserve the Company’s listing in this case may set an interesting precedent for future cases involving NASDAQ listed companies.

The Sanction Judgment can be read here and is published under the neutral citation  [2025] EWHC 3395 (Ch).

The Convening Judgment (also by Hildyard J) is published under the neutral citation [2025] EWHC 2951 (Ch).

Matthew Abraham and Rabin Kok acted for the Plan Company, instructed by Jeremy Whiteson, David Robinson, Matt Akers, Judith Davidge, Alice Morrissey, Georgia Leach, Denis O’Sullivan and a wider team at Fladgate LLP.

Joseph Curl K.C. acted for Growler Mining Tuscaloosa LLC, the key supporting and secured creditor, instructed by John Houghton, Rupert Cheetham, Aaron Harlow, Henrietta Walker, Adam Potter, Kevin Mulligan and Samuel Clein (London), David Eastlake (Houston) and Barbara A Jones and Kyle JAep (Los Angeles) at Greenberg Traurig LLP.