Project Lietzenburger Strasse HoldCo SARL, Re

At a restructuring-plan convening hearing, the court should decide matters properly before it wherever possible and should not routinely defer them to sanction. Notice is fact-sensitive, having regard to complexity, urgency and creditor sophistication. The court considers statutory jurisdictional conditions and obvious jurisdictional roadblocks at convening, while leaving plan merits and fairness to sanction. A foreign company liable to be wound up as an unregistered company may qualify as a company for Part 26A. Questions of sufficient connection and international effectiveness generally concern sanction discretion. Creditors with different rankings should vote separately. Fees, financing arrangements and other incentives do not fracture a class where fairly available or commercially structured and not materially prejudicial by reference to the relevant alternative.

Project Lietzenburger Strasse HoldCo S.à r.l., a Luxembourg holding company and guarantor of more than €1 billion of secured group debt, applied under Part 26A of the Companies Act 2006 for meetings of senior, tier 2 and junior creditors to consider a restructuring plan. The plan extended senior debt, released out-of-the-money subordinated debt and facilitated new financing for a German development project.

The application was made at a convening hearing on 16 days’ notice. Potentially dissenting creditors raised concerns about notice, jurisdiction, sufficient connection with England and class composition, although none attended or sought an adjournment. The central issues were whether the statutory jurisdictional conditions were met, whether any jurisdictional roadblock was obvious, and whether the proposed creditor classes were properly constituted.

1. Outcome. The court ordered the three plan meetings and a timetable leading to a sanction hearing in late January or early February 2024.
2. Notice. There is no fixed notice period. The appropriate period is fact-sensitive, having regard to the complexity of the plan, the urgency of the company’s financial position, the sophistication of the creditors and other relevant circumstances. The court deprecated the practice of bringing convening hearings on short notice and then seeking to defer all issues. Except in cases of extreme urgency with good reason, creditors should receive sufficient notice to enable the court to decide the matters properly arising at convening. An adjournment was not required here because no crystallised objection was likely to stop the plan and no excessively compressed sanction timetable was sought.
3. Jurisdiction. At convening, the court must reach at least a prima facie view that the jurisdictional conditions are satisfied and may identify an obvious absence of jurisdiction or another unquestionable sanctioning obstacle. The financial-difficulties and arrangement conditions in the Companies Act 2006 were satisfied at that threshold. The court relied on Re Prezzo InvestCo Limited [2023] EWHC 1679 (Ch) in accepting, provisionally, that an arrangement need not offer consideration to creditors who were out of the money.
4. International elements. A foreign company liable to be wound up as an unregistered company under the Insolvency Act 1986 is a company for Part 26A purposes. Following Re ColourOz Investment 2 LLC [2022] BCC 926, questions of sufficient connection with England and international effectiveness generally concern the court’s sanction discretion rather than the existence of jurisdiction. The deed of contribution disclosed no obvious roadblock.
5. Classes and class-fracturing arrangements. Creditors with different rankings should vote in separate classes. The proposed classes were appropriate. Consent fees available to all creditors until effectively near the meetings were not material by reference to the relevant alternative. Pro rata elevation provisions did not fracture the class, applying ED&F Man Holdings Limited [2022] EWHC 433 (Ch). A commercial backstop fee, a structuring fee for services benefiting creditors, applying Re Haya Holdco 2 Plc [2022] EWHC 1079 (Ch), and pro rata interim facilities likewise did not fracture the senior class.
6. Limits of the hearing. The court did not determine the plan’s merits or fairness. Those issues remained for the sanction hearing if at least one plan meeting approved the plan, and class-composition objections also remained open at that stage.