TG Jones High Street Limited, Re

Part 26A of the Companies Act 2006 confers a discretionary cross-class cramdown jurisdiction. The court must identify the most likely alternative if the plan fails, establish that dissenting creditors are no worse off and that an assenting class has a genuine economic interest, and then assess whether the restructuring fairly shares burdens and benefits. The starting point is pari passu treatment within an insolvency class, but justified differential treatment is permissible. Existing claims are valued by their likely recovery in the relevant alternative, while new money is valued at face value. A landlord plan may compromise future rent, even to nil, if the landlord has a rolling break right. The court need only find a reasonable prospect of success, but must not act in vain.

TG Jones High Street Limited and TG Jones Retail Holdings Limited sought sanction of restructuring plans under Part 26A of the Companies Act 2006. The companies faced imminent cashflow insolvency, with administration identified as the relevant alternative. The Plans compromised secured, landlord and unsecured creditor claims and included rent concessions, break rights, new money, deferred rent and an EBITDA-sharing arrangement.

The Plans were approved by statutory majorities in some classes but required cross-class cramdown in respect of the HSL General Creditors and ten RHL classes. The British Land landlords initially objected but agreed modifications and withdrew their opposition, subject to submissions on differential treatment. The court considered statutory compliance, class composition, the adequacy of information, the no-worse-off and genuine-economic-interest conditions, fairness of the allocation of restructuring benefits, retention of the shareholder's equity and the prospects of the turnaround.

The court sanctioned both restructuring plans and made the relevant orders on 1 July 2026.

1. The statutory preconditions under Part 26A of the Companies Act 2006 were satisfied. The Plans involved sufficient give and take, addressed financial difficulties affecting the companies' ability to continue as going concerns and pursued the statutory purpose of mitigating those difficulties. The explanatory materials were adequate. Late modifications favourable or neutral to creditors did not require the meetings to be repeated in the circumstances.
2. The court accepted the established approach to landlord-plan class composition, notwithstanding its departure from the usual focus on rights and obligations between creditors. The classes could be formed by reference to the economic performance and refurbishment needs of the relevant premises. No material blot or cross-border impediment was established.
3. The statutory no-worse-off and genuine-economic-interest conditions were met. In exercising its discretion, the court had to assess the fair sharing of the burdens and benefits of the restructuring. The relevant alternative was the value-destructive administration most likely to follow if sanction were refused. The starting expectation of pari passu treatment within an insolvency class could be departed from where justified by the relative contribution or criticality of premises, break rights, the source of value and the evolution of the Plans. The court could also consider the interests of the shareholder and creditors outside the compromises.
4. For contribution analysis, existing claims were appropriately valued by their estimated recovery in the relevant alternative, while new money was valued at face value. The analysis had to allow for the contribution made by compromising claims that were out of the money. Allocation reports were useful directional evidence, not mathematical proof. The court accepted that the benefits were fairly allocated.
5. New money was materially more valuable than the release of an impaired existing claim and could justify retention of equity. The Plans could compromise pecuniary liabilities under uneconomic leases, including future rent, to nil where landlords had rolling break rights; they could not impose a surrender of the proprietary lease. The court's observation that deferred rent was not equivalent to new money was expressly non-determinative.
6. The court did not need certainty that the turnaround would succeed. A reasonable prospect of achieving the Plans' purpose was sufficient, and that threshold was met despite execution risk. The court emphasised that complex Part 26A applications require a timetable allowing responsible judicial consideration and that its function is dispositive, not ministerial.

First-instance sanction decision. The judgment records the convening hearing before Marcus Smith J and the sanction hearing, but no appeal is stated.