Iguanas Holdings Limited, Re

At a convening hearing for a restructuring plan, the court determines whether the statutory jurisdictional conditions are met, whether the proposed creditor classes permit constructive consultation, and whether creditors have received sufficient notice and information. The court does not generally assess the fairness of the plan at that stage. Class differences justify separate meetings only where they create materially different rights or interests in the relevant alternative. Differences in lease duration, turnover-rent provisions, or an unenforceable security interest will not fracture a class where creditors have more in common than divides them. The relevant alternative is central to assessing both class composition and the plan’s later fairness.

Iguanas Holdings Limited applied for directions under Part 26A of the Companies Act 2006 to convene creditor meetings concerning a restructuring plan. The plan proposed compromises affecting secured debt, landlord liabilities, business-rates liabilities and other unsecured property claims, with a prepack administration identified as the relevant alternative.

The court considered the statutory conditions, notice and information, possible implementation roadblocks, and the proposed composition of seven creditor meetings. Following objections from Class A landlords, the plan company withdrew that part of the proposal. The central issues were whether the plan was capable of proceeding and whether the proposed classes were properly constituted.

1. Convening hearing. The court was not required at this stage to determine the fairness of the proposed restructuring plan. As explained in Re Telewest Communications plc [2004] BCC 342 at [14], fairness is principally a matter for the sanction hearing. The convening hearing instead addresses jurisdiction, class composition, adequacy of notice and information, and potential roadblocks or blots affecting workability.
2. Jurisdiction. The plan company was a company for the purposes of Part 26A, and the proposal constituted a compromise or arrangement involving sufficient give and take. The court adopted a broad approach and did not measure the equivalence of what was given and received. Conditions A and B in section 901A of the Companies Act 2006 appeared to be satisfied.
3. Class constitution. The secured creditor properly formed a separate class. The four landlord groups, business-rates creditors and general property creditors were also appropriately separated because their rights or treatment differed materially. Further subdivision was unnecessary. Different lease terms did not fracture the landlord classes because there was more uniting than dividing them. Turnover-rent provisions did not create substantive differences in the relevant alternative, particularly since no turnover rent would be paid under the plan. The Glasgow landlord’s Scots-law hypothec did not require separate treatment where there was no relevant property to seize.
4. Other matters and order. The relevant alternative was a material part of the statutory structure and informed both class composition and the later fairness assessment. The court accepted the expert reports, approved virtual meetings subject to clearer participation rights, and ordered that Class A landlords be excluded from the plan. Subject to greater specificity concerning paragraph 9 of the draft order, the proposed order was approved.