Judgment Hand Down: Re Poundstretcher Limited [2026] EWHC 1438 (Ch)

The Court has sanctioned a restructuring plan proposed by Poundstretcher Limited. The company was in severe financial difficulty due to falling sales, rising costs and an expensive lease portfolio, and would likely have entered into administration absent a restructuring of its liabilities.

The plan was approved by eight creditor classes, but six creditor classes voted against it. The plan was also opposed at the sanction hearing by three landlord creditors. Two of those landlord creditors opposed the plan on the basis that it proposed to compromise the guarantees of their leases granted by the plan company’s parent company (PLL), to mirror the terms of their guaranteed leases as amended by the plan. The landlord creditors argued that the plan was “more intrusive than is necessary or proportionate” in compromising their claims against PLL under the guarantees and that the plan should be amended to instead compromise the “ricochet” claims from PLL against the plan company.

Hildyard J was satisfied that it was appropriate to sanction the plan, in exercise of the Court’s cross-class cram down powers against the dissenting classes. The judge distinguished PLL’s guarantees from third-party guarantees, as PLL was part of the Poundstretcher group structure and its only material asset was its shareholding in the plan company. The ability of PLL to satisfy any guarantee obligations was therefore intrinsically linked to the value and financial position of the plan company, and allowing the guarantees to remain in place could destabilise the restructuring and undermine the rescue of the group.

Tom Smith KC, Henry Phillips and Annabelle Wang acted for Poundstretcher Limited, instructed by Elaine Nolan and Gabe Harley of Keystone Law.