The Plan Company is incorporated in Mauritius with an operating subsidiary in Madagascar. Its proposed restructuring plan is novel in a number of ways: it appears to be the first restructuring plan to involve just two pari passu creditors with opposing interests, with one creditor in each class. It is also only the second ever plan involving a potential ‘cram across’ in the history of Part 26A, the first being Sino Ocean which was sanctioned earlier this year. The plan is also only the second plan to involve a Mauritian company, and also involves cross-border issues arising in Madagascar, Bermuda and other jurisdictions.
One creditor (and the plan company) support the plan, while the other creditor opposes it. The aim of the plan is to compromise certain liabilities arising under a shared English law guarantee granted by the Plan Company in favour of both plan creditors, as well as certain intercompany debt. The opposing creditor will be granted the option of a cash payment or long-term revenue share while the supporting creditor’s debt will be written off for £1 and the supporting creditor will provide new money.
At the convening hearing, Mr Justice Mellor gave detailed consideration to a number of issues, including the opposing creditor’s challenge to the plan on the (unusual) ground that the supporting creditor’s rights were being expropriated, and class composition. He concluded that there was sufficient give and take, after considering a number of previous authorities on this topic including Adler and Great Annual Savings. Mr Justice Mellor also concluded that the supporting and opposing creditor formed separate classes: despite the similarity in their rights going into the plan, the judge concluded that the plan consideration given to each was very different and that the creditors’ past relationship showed that they could not consult together.
In another first for restructuring plans, the Court has ordered a CMC be held to determine the permissible grounds of objection by the opposing creditor, and give other directions.”
Featured Members: Mark Phillips KC, Matthew Abraham and Rabin Kok (instructed by Shoosmiths) acted for the Plan Company.
