Project Lietzenburger Straße Holdco SARL, Re

The court has a broad discretion when deciding whether to sanction a restructuring plan under Part 26A of the Companies Act 2006. Where there is no cross-class cramdown, the discretion may be guided by the four questions used for schemes: statutory compliance; fair representation and bona fide voting for proper purposes; whether an intelligent and honest creditor might reasonably approve the plan; and whether the plan contains any other blot or defect. These questions should guide the analysis without making it compartmentalised. Where the statutory and procedural requirements are satisfied, the relevant creditor class has fairly approved the plan, the plan is one which creditors might reasonably approve, and no blot exists, the court may sanction it under section 901F.

The judgment followed an earlier judgment delivered on 4 March 2024. Following that judgment, the court ordered a further meeting of Senior Creditors to consider an Amended Plan. By an order under section 901C(4) of the Companies Act 2006, Subordinated Creditors were not represented at the further meeting.

All Senior Creditors were represented at the New Plan Meeting and 97.3% by value voted in favour of the Amended Plan. No party submitted that the plan should not be sanctioned. The central issue was whether the court should exercise its discretion to sanction the Amended Plan under section 901F.

1. Applicable discretion. The court held that it had a broad discretion whether to sanction the Amended Plan. It considered that the four questions identified by Snowden J in Re KCA Deutag UK Finance Plc [2020] EWHC 2977 for Part 26 schemes were equally applicable to a Part 26A plan involving no cross-class cramdown: statutory compliance; fair representation and bona fide voting for proper purposes; whether an intelligent and honest creditor might reasonably approve the plan; and whether there was any other blot or defect.
2. The four questions were an appropriate framework, but the court would not allow consideration of the discretion to become compartmentalised. The statutory requirements had been satisfied, the new convening order had been complied with, and the evidence established full representation of Senior Creditors and approval by 97.3% by value.
3. The court remained satisfied that the Senior Creditors were fairly represented, were voting in their capacity as members of the single class, and were not coerced into producing the majority. An intelligent and honest Senior Creditor could reasonably approve the Amended Plan.
4. The court found no blot or defect. Its earlier conclusions concerning forum shopping and sufficient connection with the United Kingdom continued to apply. The only change from the original Plan concerned the €200,000 payment to Subordinated Creditors.
5. Section 901G was inapplicable because only Senior Creditors had been summoned to the New Plan Meeting and they had approved the Amended Plan. The Amended Plan was sanctioned under section 901F. Agreed costs meant that the costs applications did not require determination.

Not stated in the judgment.