Enzen Global Limited & Anor, Re

At a convening hearing under Part 26A of the Companies Act 2006, the court determines jurisdiction, notice, obvious and fundamental roadblocks, and the appropriate constitution of creditor classes. It does not decide the substantive fairness or merits of the restructuring plan. A proposed arrangement requires an element of give and take with each class, but fairness is reserved for sanction. Class composition depends on whether creditors can consult together with a view to their common interest, considering differences in rights before and after the plan and in the relevant alternative. Unknown and contingent unsecured claims may be included in a catch-all class. Creditors whose support is necessary for business continuation may be excluded. The court should not ordinarily reserve a general de novo reconsideration of convening decisions, although it remains able to review them for good reason or changed circumstances.

Enzen Global Limited and Enzen Limited applied for orders convening creditor meetings to consider inter-conditional restructuring plans under Part 26A of the Companies Act 2006. The plans restructured secured debt, compromised unsecured liabilities, excluded critical trade creditors, and proposed six classes for Enzen Global Limited and five for Enzen Limited.

The court considered notice, the jurisdictional conditions, international recognition, possible roadblocks, the proposed creditor classes, the treatment of subordinated and unknown claims, and whether a general reservation for de novo reconsideration should be included in the convening order.

1. Convening jurisdiction. The court was satisfied that the companies had encountered financial difficulties affecting their ability to continue as going concerns. The plans involved sufficient give and take with each proposed class to constitute compromises or arrangements. Their fairness was not for determination at the convening stage.
2. Notice and roadblocks. The Practice Statement Letter gave creditors sufficient notice, assessed in light of the complexity of the plans, the urgency of the financial position, and creditor sophistication. The court found no obvious roadblock. The relevant test was whether the plan appeared futile because of a jurisdictional bar or failure of recognition, not whether a possible objection might be discovered on detailed investigation.
3. International effectiveness. The companies’ incorporation in England satisfied the statutory jurisdictional connection. The court could compromise liabilities governed by foreign law where there was a realistic prospect of recognition abroad. The evidence concerning Spain disclosed no sufficient obstacle.
4. Class composition. The proposed classes were appropriate. Creditors may be grouped where their rights permit consultation in pursuit of a common interest, considering both their rights before the plan and the rights conferred by it. The secured creditor classes could properly be combined in the proposed manner. HMRC’s secondary preferential claims warranted a separate class. Unknown and contingent unsecured claims could be included in a catch-all unsecured class.
5. Special classes and exclusions. Subordinated creditors were properly separated because the rule against double proof meant that they could not receive distributions until the corresponding principal claims were paid in full. Critical trade creditors could be excluded where their support was necessary to continue the business. The landlord, with its distinctive statutory security and treatment, was properly placed in a separate class.
6. Status of the decision. The court declined to include a general provision requiring de novo reconsideration at sanction. That did not bind the sanction judge: the court could review its approach if it had taken a false step or special circumstances or new events arose.

The meetings were convened as proposed, with directions for opposition notices, evidence, skeleton arguments, and expert evidence.

First-instance convening decision. No prior appellate history is stated in the judgment.