TG Jones High Street Limited, Re

On an application to convene meetings for restructuring plans, the court must balance the companies’ prejudice from delay against the benefits of allowing creditors further time to negotiate and prepare objections. A short adjournment should not be ordered where the evidence shows a material risk to the companies’ survival and the issues can be fairly prepared within the existing timetable. Negotiations may proceed in parallel with preparations for the sanction hearing. Any material changes to the plans remain subject to the court’s control and require its sanction before being considered at the sanction hearing.

A pre-emptive costs order should not be made merely because a creditor’s participation is important. The relevant question is whether refusing such protection would prejudice the creditor’s participation.

TG Jones High Street Ltd and TG Jones Retail Holdings Ltd applied for orders convening creditor meetings to consider proposed restructuring plans under Part 26A of the Companies Act 2006. The jurisdictional requirements and the absence of any road-block were accepted, and the making of convening orders was not opposed in principle.

The British Land Landlords sought a two-week adjournment to enable further negotiations and possible improvements to the plans. The court also considered the timetable for creditor evidence, control of any amendments to the plans, coordination of creditor objections, and applications for costs protection.

1. Convening orders. The court refused the application for a two-week adjournment and ordered the proposed plan meetings to be convened. The jurisdictional and discretionary requirements for making the orders were accepted and were not in issue.
2. Adjournment and timetable. The court balanced the material risk that delay would cause serious prejudice to the financially distressed Plan Companies, potentially preventing them from reaching the sanction hearing, against the advantages of further negotiations. Although further discussions were beneficial and should be encouraged, they did not outweigh the risk of adjournment where there was sufficient time to negotiate in parallel with preparation for the sanction hearing.
3. The timetable had to permit the issues for the sanction hearing to be fairly, properly and sufficiently articulated. The court accepted that creditor evidence could be served by 4.30 pm on 18 June, with responsive evidence thereafter. Any proposed modifications to the plans were to be circulated by 16 June.
4. Control of modifications. A convening order would proceed on the basis of the plans then existing. The Plan Companies could not treat the plans as a moving feast. Any negotiated changes required the court’s sanction before the varied plans could be debated at the sanction hearing. The order included liberty to apply to vary the timetable, including any sanction hearing date.
5. Coordination and costs. A third-party solicitor was unnecessary because the Plan Companies accepted responsibility for identifying and fairly presenting objections from other creditors. Costs of the hearing were reserved. Although the court had jurisdiction to make a pre-emptive costs order, it refused one because British Land had already participated actively, was represented, and had raised no funding issue. Such an order remained available to another creditor where its absence would prejudice participation, subject to considerations including need and duplication.

Not stated in the judgment.