TG Jones High Street Limited, Re

Sanction under Part 26A requires a fact-sensitive, multi-factor assessment. The court may approve late modifications where it has jurisdiction and concludes that creditors are not prejudiced by the delay. In considering cross-class cramdown, it may compare the treatment of dissenting creditors with the relevant alternative and assess whether the allocation of benefits and differential treatment are fair and proportionate. The court need not be satisfied that a restructuring plan will achieve its purpose; it is enough that the plan has a real prospect of doing so.

TG Jones High Street Limited and TG Jones Retail Holdings Limited, which operated 451 former WH Smith stores rebranded as TG Jones, sought sanction of inter-conditional plans under Part 26A of the Companies Act 2006. The plans aimed to avoid insolvent administration, provide liquidity, rationalise the leasehold estate and compromise liabilities. Final changes were notified on 23 June 2026, one day before 16 creditor class meetings, despite a 16 June deadline in the convening order. Landlords objected, and St Albans City and District Council made representations as a business rates creditor. The court considered late notice, cross-class cramdown, creditor returns under the relevant alternative, allocation and differential treatment of benefits, and whether the proposed turnaround had a real prospect of success.

1. Late amendments. Although the final changes were notified after the timetable set by the convening order, the court had jurisdiction to sanction the plans as modified and exercised its discretion to do so. The changes adversely affected Modella, not plan creditors; the other creditors’ terms improved. The judge therefore concluded that the late notice did not give creditors a reason to change their votes.
2. Cross-class cramdown and creditor outcomes. Imposing rent reductions and other modifications on dissenting landlords caused the court its greatest concern. It accepted that the relevant alternative was a value-destructive administration that would produce lower returns. The treatment offered under the plans, including the termination right for landlords and the profit-sharing entitlement if the turnaround succeeded, was better overall, although some reductions were harsh. Support from some creditors in dissenting classes provided limited additional comfort.
3. Allocation and differential treatment. The court found insufficient grounds to reject the experts’ conclusion that the allocation of benefits was broadly fair and not disproportionate. Modella’s retention of its uncertain equity interest was sufficiently justified by its loan commitments and the profit-sharing arrangement. Differences between creditor categories, including landlord classes, were justified by their relative contributions. The judge therefore found no disqualifying differential treatment. It was unnecessary to decide whether future rent reductions should also be treated as new money.
4. Prospect of success. The court did not have to be satisfied that the plans would achieve their purpose; a real prospect of doing so was sufficient. Despite execution risks and some generic turnaround assumptions, the judge was not able to conclude that success had no real prospect.

The judge proposed to sanction both plans and would hear submissions on the form of order and undertakings, including undertakings from Modella.