The Enzen plans were the first Restructuring Plans that had received the support of HMRC, which voted in favour of the Plans and also attended the sanction hearing as a supporting creditor. Sir Alastair stated “I regard this increased engagement as a welcome development on the part of a prominent creditor”.
Three dissenting creditors expressed a variety of objections which were considered by Sir Alastair at the sanction hearing. The most significant ground of opposition was the contention that there had been an impermissible departure from the pari passu principle, because unsecured creditors would receive a flat payment of £1,000 irrespective of the value of their claim.
Sir Alastair considered that this was permissible in the circumstances of the case, which included that (1) all of the unsecured creditors were out of the money, (2) the payment of £1,000 was sourced from funds provided by the secured creditors, and (3) the costs of a granular claims assessment process would have been disproportionate.
At the convening hearing, Mr Justice Hildyard gave detailed consideration to the specific class composition issues and notification issues that arose because of the nature of the companies’ creditors.
Significantly, his Lordship considered that it was permissible for the companies to include in the voting classes creditors who were presently unknown. This was important because (1) there was doubt about the accuracy of the company’s records of its own creditors, and (2) insolvency practitioners were to be appointed to a foreign subsidiary – but were not yet in office – and so could not be notified or identified.
Moreover, Hildyard J considered it was permissible to convene a ‘catch-all’ class of unsecured creditors, defined by the nature of their claim.
Read the sanction judgment here.
Read the convening judgment here.
Adam Al Attar KC and Stefanie Wilkins, instructed by Simmons & Simmons, acted for the plan companies.
Charlotte Cooke, instructed by Paul Hastings, acted for the secured creditors.
William Willson was instructed by HMRC.
