In the matter of AGPS Bondco Plc

The court considered a convening hearing under Part 26A of the Companies Act 2006 and concluded that the Plan Company should be permitted to convene scheme meetings. The judge held that the statutory threshold under section 901A was met for the purposes of convening meetings, but deferred contested questions about the effectiveness of the substitution of indebtedness into the English Plan Company and related jurisdictional objections to the sanction hearing. Directions were given to manage a tightly constrained and urgent timetable, limited disclosure was ordered with a longstop, and a request to modify voting forms to require disclosure of investment managers/cross-holdings was refused as unlikely to produce useful information and liable to distract the sanction hearing.

Background and parties. The Plan Company (AGPS Bondco plc) sought directions to convene meetings for a Part 26A scheme of arrangement to implement a restructuring of a number of unsecured notes (the SUNs) issued within the Adler group. The scheme aimed to facilitate the raising of new financing to avoid imminent defaults (including an Alder Re loan maturing 27 April 2023), to amend payment and security provisions under the SUNs and to provide an interest holiday.

Procedural posture and relief sought. The application was a convening hearing under the Companies Act 2006 seeking an order to convene creditor meetings and directions for a subsequent sanction hearing. The principal adversaries were an Ad Hoc Group of opposing creditors (AHG) and a Steering Committee of creditors. The Plan Company relied on substantial factual and expert material including a commercial report and expert opinions on German and Luxembourg law.

Issues framed by the court. The court addressed: (i) whether the requirements of section 901A and Part 26A were satisfied for convening meetings; (ii) class constitution; (iii) the urgency and timetable for evidence and the sanction hearing; (iv) disclosure (including cross-holdings) and the timing for provision of documents; and (v) whether voting forms should be modified to require disclosure of investment managers/cross-holdings.

Court reasoning and conclusions. The judge concluded that, for the purposes of convening meetings, the section 901A requirements were satisfied and that the Plan Company should be permitted to convene meetings, while noting that the validity of the substitution into the Plan Company and the broader question of whether the English court should exercise its jurisdiction in these particular circumstances should be decided at the sanction hearing. Classes were properly constituted on a conservative basis. Given the pressing commercial timetable (notably the need for a sanction decision effectively by 12 April to enable funding before 27 April), the court directed a tight evidence timetable proposed by the company (with the meeting set for 16 March and a heavily case-managed sanction hearing before Easter). The court ordered disclosure to be provided as soon as available with a longstop of 6pm on the day specified, but refused the AHG's proposed modification of voting forms to require identification of investment managers/cross-holdings on the grounds that such disclosure would not reliably reveal cross-holdings, would be of limited utility and risked distracting from the sanction hearing.

The court granted the Plan Company permission to convene scheme meetings under Part 26A and section 901A of the Companies Act 2006 and gave case management directions for an expedited timetable culminating in a sanction hearing before Easter. The court deferred substantive challenges including the effectiveness of the substitution into the Plan Company and objections to the use of an English Part 26A scheme to the sanction hearing. Disclosure was ordered to be provided promptly with a longstop, and the proposed modification to voting forms requiring identification of investment managers/cross-holdings was refused because it was unlikely to produce meaningful information and risked distracting the sanction hearing.