CB&I UK Ltd

The court considered an application under Part 26A of the Companies Act 2006 to convene meetings of creditors to consider a restructuring plan. The key legal issues were whether adequate notice of the convening hearing had been given, whether the jurisdictional conditions in section 901A were prima facie satisfied, whether any jurisdictional "roadblocks" (including the power to impose new obligations and issues of international recognition) precluded convening meetings, and whether the proposed class composition was appropriate.

The court, having regard to the Plan Company's evidence (including valuation and relevant alternative analysis provided by Grant Thornton and the definition of the relevant alternative under section 901G as a worldwide insolvency process), concluded that sufficient notice had been given for the convening hearing, that conditions A and B of section 901A were satisfied on the material before the court, and that there were no obvious jurisdictional bar to convening meetings. Class composition was provisionally accepted as sensible. The court therefore ordered that plan meetings be convened and gave directions for a sanction hearing (allowing objectors to raise matters at sanction), while reserving detailed assessment of contested issues for the sanction hearing.

Background and parties: The Plan Company, CB&I UK Limited, sought an order under Part 26A Companies Act 2006 to convene creditor meetings to consider a restructuring Plan. The Plan Company is a UK-registered member of a larger group with secured facilities governed by New York law. Key interested parties included an ad hoc group of supportive secured creditors, Credit Agricole (agent and issuing bank), Reficar (an unsecured creditor and objector), the Wood parties (potential contribution claimants), and certain distressed debt funds.

Nature of the application: The application was for convening meetings of seven classes of Plan Creditors so the proposed Plan (which extends secured facilities' maturities, modifies secured financing arrangements and compromises certain unsecured liabilities) could be voted on and, if approved, brought to a sanction hearing.

Factual matrix: The Plan Company and group faced severe liquidity pressure. Obligations included a requirement to provide cash collateral for outstanding letters of credit by 27 March 2024 and several secured facilities maturing in June 2024 (and one in June 2025). The Plan seeks to extend maturities (to 2027), alter covenants, migrate part of a super-senior facility into a Tanks facility, and to compromise certain unsecured claims (notably claims by Reficar and Contraloría) for modest contingent or fixed cash payments. The Plan is conditional on a parallel WHOA restructuring in the Netherlands. Grant Thornton provided valuation and recovery analyses; the Plan Company defined the relevant alternative under section 901G as a worldwide insolvency process.

Issues framed by the court:

• Whether sufficient notice had been given of the convening hearing.
• Whether the jurisdictional conditions in section 901A (conditions A and B) were satisfied.
• Whether there were jurisdictional roadblocks (e.g. "new obligations" point; international recognition under Chapter 15/foreign law issues) plainly preventing sanction.
• Whether the proposed class composition was appropriate.
• Timetabling for plan meetings and the sanction hearing, and requests for further disclosure.

Court's reasoning and disposition: The court found the practice statement letter provided adequate notice, despite voluminous expert material having been served shortly before the hearing. On the evidence before it the court was prepared to take a provisional view that conditions A and B of section 901A were satisfied, whilst noting that a fuller assessment would occur at the sanction hearing when objectors had had time to present evidence. The court declined to treat arguable points (including the new obligations issue and recognition questions) as jurisdictional roadblocks at this stage and reserved them for the sanction hearing where expert or contested evidence could be heard. The proposed seven classes were provisionally accepted (including the separate treatment of two pari passu tranches for sensible practical reasons), subject to final determination at sanction. The court ordered plan meetings for 7 November 2023 and directed a sanction hearing in late November 2023 (ultimately accommodated in the week commencing 27 November 2023 for four hearing days plus one pre-reading day). The court directed parties to agree timetabling and to take a cooperative approach to any targeted disclosure applications, but left formal disclosure applications to be made if necessary.

The application to convene meetings was granted and directions were given for the sanction hearing. The court concluded on the material before it that conditions A and B of section 901A Companies Act 2006 were satisfied prima facie, there was sufficient notice of the convening hearing, and there were no obvious jurisdictional roadblocks that would prevent sanction; contested or complex points (including the "new obligations" issue and international recognition) were reserved for determination at the sanction hearing. Consequently the court ordered meetings and fixed a timetable culminating in a multi-day sanction hearing in late November 2023.