Haya Holdco 2 Plc, Re
[2023] EWHC 2192 (Ch)
In the matter of Lamo Holding B.V.
26 June 2023
[2023] EWHC 1558 (Ch)
High Court
A company wanted to restructure its debts. Some shareholders disagreed. A judge decided the plan was better than letting the company go bankrupt, so the plan was approved even though some shareholders weren't happy.
Key Facts
- •Lamo Holding B.V. (the "Company") applied for an order to sanction a scheme of arrangement with its creditors under Part 26 of the Companies Act 2006.
- •The Scheme was part of a wider restructuring involving the Vroon Group, including proceedings in the Netherlands under the Wet homologatie onderhands akkoord (WHOA).
- •Shareholders of Vroon Group B.V. (the "Parent") opposed the Scheme, arguing the comparator should be a solvent wind-down, not liquidation.
- •The Scheme was approved by the requisite statutory majority at the Scheme meetings.
- •The Dutch Court confirmed the WHOA Plan before the English Court handed down its decision.
Legal Principles
The court must ensure compliance with statutory requirements, fair representation of the class, bona fide action by the majority, reasonable approval by an intelligent and honest member of the class, and absence of any 'blot' or defect.
Re Telewest Communications (No 2) Ltd [2005] 1 BCLC 772
A party not bound by a scheme may have standing to oppose sanction if the scheme is unfair or has defects, considering the connection between the scheme and subsequent steps.
Re BAT Industries plc (Neuberger J, unreported, 3 September 1998); Re Bluebrook Ltd [2010] BCC 209; Re Noble Group Ltd [2019] BCC 209; Re Swissport Fuelling Ltd [2020] EWHC 3413 (Ch); Re Steinhoff International Holdings NV [2021] EWHC 134
In a scheme, the court must identify the comparator (what would happen if the scheme fails) to assess whether the scheme is better than the alternative.
Re Stronghold Insurance Co Ltd [2018] EWHC 2909
A company is free to select creditors for a scheme, but excluding too many may make it unworkable.
Re Bluebrook Ltd [2010] BCC 209
The court considers whether the scheme will be effective in key jurisdictions.
Re Vietnam Shipbuilding Industry Group [2014] 1 BCLC 400; Re ColourOz Investment 2 LLC [2020] EWHC 2464 (Ch)
Article 384 of the Dutch Bankruptcy Act sets out the test for approving a WHOA plan, including a comparison to liquidation.
Dutch Bankruptcy Act, Article 384
Outcomes
The Court sanctioned the Scheme.
The Court found the statutory requirements were met, the majority acted bona fide, the Scheme was reasonably approvable by creditors, and there were no defects. The comparator was insolvent liquidation, and the Scheme offered a better outcome. The Shareholders' objections, while heard, did not outweigh the benefits of the Scheme, especially given the Dutch Court's concurrent approval of the WHOA Plan.