New restructuring plan judgment: Re TG Jones High Street Limited [2026] EWHC 2079 (Ch)

On 5 August 2026, Mr Justice Hildyard handed down judgment explaining why, on 1 July 2026, he sanctioned two interconnected restructuring plans (“the Plans”) promulgated by companies in the TG Jones group.

TG Jones is the trading name of what once was the high street business of WH Smith PLC, before it was sold to the Modella investment fund in 2025. The business currently operates approximately 450 stores selling, among other things, stationery, gifts and books. As with much of the high street, the business has experienced real financial difficulties in recent years. The purpose of the Plans was to access essential liquidity for the business turnaround, rationalise the leasehold estate and compromise certain other liabilities. The terms of the Plans reflected other retail restructuring plans that have been before the court and included categorising leases by reference to the profitability of the underlying store and imposing (albeit with the right of a landlord to terminate in each case) rent reductions based on the economics of the store.

The Plans had initially been opposed by a number of landlords connected to the British Land group. However, negotiations took place between the convening hearing and the sanction hearing and changes were made to the Plans to improve the terms offered to landlords. British Land withdrew its opposition as a result.

Following a hearing on 29 June 2026, and “after anxious and careful review” (at [194]), Mr Justice Hildyard sanctioned the Plans. The judge was persuaded that, particularly in light of the modifications that were made following negotiations with British Land, the Plans represented a genuine attempt to formulate a fair and reasonable restructuring. There was a logical explanation for the differential treatment of creditors (the relative importance of the creditor to the business) and a fair distribution of the benefits of the restructuring by reference to the contributions made by each creditor group. The judge took particular care in examining the justification for Modella retaining its equity interest, which he considered to be fair given its contributions and the fact that the Plans had the “hallmarks of an adventurous equity play” (at [190]) with considerable execution risk.

Despite withdrawing its objections, British Land still attended the sanction hearing to argue that (with an eye to future retail restructurings) future rent reductions accepted by landlords should be treated as though they were new money injections and therefore given additional weight as “contributions” to a restructuring plan. The Plan Companies disputed this analysis, which they said did not reflect previous decisions in cases such as Re New Look [2021] EWHC 1209 (Ch) that the loss of future rent is not the result of the restructuring but is instead the result of the tenant company’s inability to pay the rent. Mr Justice Hildyard declined to decide the point as it was unnecessary for him to do so though he regarded the Plan Companies as having “the better of the argument” (at [207]). The argument will have to await a decision in a case where it is critical to the outcome.

Tom Smith KC, Ryan Perkins and Jon Colclough acted for the successful Plan Companies

Read the full judgment here