Key Facts
- •NGI Systems & Solutions Limited (NGI) is a shareholder, supplier, and creditor of The Good Box Co Labs Limited (the Company).
- •The Company, a provider of bespoke payment terminals for charities, entered administration in June 2022.
- •NGI proposed a restructuring plan under section 901F of the Companies Act 2006, while the Company's directors favored a pre-pack sale.
- •The restructuring plan involves new funding, debt restructuring, and a change in the Company's constitution.
- •The plan was approved by the required majorities of creditors and shareholders, except for the Convertible Loan Holders.
- •The Administrators opposed the plan, primarily due to the lack of Company consent and concerns about employee job security.
Legal Principles
Court jurisdiction to sanction a restructuring plan under Part 26A of the Companies Act 2006 requires the company's consent.
Re Savoy Hotel Limited [1981] 1 Ch 351
Cross-class cram-down under s901G allows sanctioning even if a class votes against the plan, provided certain conditions are met.
Re Amicus Finance [2021] EWHC 3036 (Ch)
The court must consider whether the plan is one that a reasonable class member would enter into, considering their interests.
Re Amicus Finance [2021] EWHC 3036 (Ch)
The court has discretion to sanction a plan despite a dissenting class if the conditions for cross-class cram-down are met and it's fair.
In re DeepOcean [2021] BCC 483
Outcomes
The court sanctioned the restructuring plan.
The court found that the plan met the requirements of Part 26A, including the cross-class cram-down provisions, and was in the best interests of creditors and shareholders despite the Administrators' opposition and the dissenting vote of the Convertible Loan Holders. The court directed the Administrators to provide the Company's consent.
The Administrators' application for a direction to sell the Company's assets was dismissed.
Sanctioning the restructuring plan rendered the sale application moot.