Plusholding GmbH, Re

This is an application by PlusHolding GmbH to convene a single creditors' meeting under Part 26 of the Companies Act 2006 to consider a scheme of arrangement compromising the English-law Term Facilities. The judge held that (i) there was statutory jurisdiction under section 895 CA 2006 (a foreign company falls within the statutory definition of "company"), (ii) adequate notice had been given, and (iii) the Scheme Creditors formed a single class because their rights were materially identical and the scheme would treat them rateably. The court rejected arguments that the Lock-Up Agreement, new-money pricing (backstop fee and original issue discount), payment of advisers' fees and governance or release arrangements fractured the class. The judge ordered the convening of a single Scheme Meeting to consider the proposed scheme.

This is a first instance application by PlusHolding GmbH (a German holding company) for an order convening a single meeting of its 36 lenders to consider a scheme of arrangement under Part 26 of the Companies Act 2006. The Group's principal operating subsidiary is PlusServer GmbH and the Group faces financial distress with a Term Loan B facility and Incremental Facility totalling about €264.7m outstanding and maturing 31 August 2024. The proposed restructuring would transfer ownership of the Group to the lenders, reinstate and split debt between a reduced "Reinstated TLB" and a HoldCo PIK facility, and offer a pro rata New Money Facility.

The application framed a number of issues for the convening stage:

• Whether adequate notice had been given of the convening hearing;
• Whether the Court had jurisdiction to convene a meeting regarding a foreign company and English-law obligations;
• Whether the Scheme Creditors formed a single class for voting purposes or should be divided into separate classes because of differences arising from the Lock-Up Agreement, new-money economics (backstop fee and OID), payment of advisers' fees, governance nomination rights and mutual releases;
• Whether the explanatory statement was adequate and whether there were apparent obstacles to the scheme's effectiveness.

The judge's reasoning was as follows. Notice was sufficient in the circumstances. There was statutory jurisdiction under section 895 CA 2006 to convene the meeting; international jurisdictional questions would be considered at sanction but there were no special factors at the convening stage militating against exercise of the statutory power because the core obligations compromised were governed by English law. On class composition the judge applied the well‑known test that a class must consist of those whose rights are not so dissimilar as to prevent consultation in their common interest. He concluded the lenders formed a single class because their existing rights were materially identical and the scheme would treat them rateably. The judge addressed potential class‑fracturing features: the Lock-Up Agreement did not fracture the class; the backstop fee and OID were commercial pricing features available rateably and did not prevent consultation; payment of certain advisers' fees merely defrayed expenses and did not create a material benefit fracturing the class; releases and governance nomination rights did not create such material differences as to prevent the class consulting together. The explanatory statement was adequate. The court therefore ordered the convening of a single meeting of Scheme Creditors.

The Court made an order convening a single meeting of Scheme Creditors under Part 26 CA 2006. The judge concluded there was statutory jurisdiction under section 895, adequate notice, and that the creditors constituted a single class because differences arising from the Lock-Up Agreement, new‑money pricing, fee payments, releases and governance arrangements were not so material as to prevent collective consultation; accordingly the convening order was made.