CB&I UK Limited, Re

At a convening hearing for a restructuring plan, the court does not determine the plan’s merits or fairness. It considers whether the statutory jurisdictional conditions are prima facie satisfied, whether the proposed classes are appropriate, and whether any obvious jurisdictional obstacle would prevent a later sanction order. The court may express only a provisional view where opposing creditors have had limited time to respond. Adequate notice is fact-sensitive and depends on matters including the plan’s complexity, urgency, creditor sophistication and legal representation. Meetings may be convened despite compressed preparation time, provided affected parties retain a fair opportunity to raise properly identified objections at the sanction hearing. A potential issue will not ordinarily prevent convening where it is at least respectably arguable and can sensibly be determined at sanction.

CB&I UK Limited applied under Companies Act 2006 Part 26A to convene meetings of secured and unsecured creditors to consider a restructuring plan. The proposed plan concerned extensions and amendments to secured financing arrangements and compromises of substantial unsecured claims, against the background of financial distress and a proposed parallel Dutch restructuring.

The issues were whether sufficient notice had been given, whether the jurisdictional conditions in sections 901A and 901G were satisfied, whether any jurisdictional roadblock unquestionably prevented sanction, whether the proposed creditor classes were properly constituted, and what directions should be made for meetings and the sanction hearing.

1. Convening order. The application succeeded. Meetings of the proposed creditor classes were ordered, with the sanction hearing directed to take place in the week commencing 27 November 2023.
2. Function of the convening hearing. The court’s role at this stage is not to decide the merits or fairness of the restructuring plan. Those matters fall for consideration at the sanction hearing if the statutory voting requirements are met.
3. Notice and procedural fairness. Whether notice is sufficient is fact-sensitive. Relevant considerations include the complexity of the plan, the urgency of the company’s position, the sophistication and legal representation of creditors, and the time available to digest the evidence. Although extensive evidence had been served only shortly before the hearing, the notice was sufficient. The opposing parties remained entitled to raise threshold, jurisdictional and fairness objections at sanction, provided those points were identified in advance and did not create an ambush.
4. Statutory conditions and jurisdictional obstacles. On the evidence available, conditions A and B in section 901A were satisfied for the limited purpose of convening meetings. The assessment was provisional and could be revisited at sanction. A potential obstacle would justify refusing to convene only if it were obvious that the court lacked jurisdiction or that refusal to sanction was unquestionably required. A point that was at least respectably arguable, including the question whether the plan imposed new obligations through extensions of unused letter-of-credit facilities, was not a sufficient roadblock at this stage.
5. Class composition. The proposed separation of creditors according to their ranking and their different rights under the plan was presently sensible. Any further objections to class composition could be raised at sanction.
6. Timetable. The court balanced the company’s operational urgency against creditors’ need for a fair hearing. The sanction hearing was fixed for the later, longer listing available in the week commencing 27 November 2023.