Consort Healthcare (Tameside) Plc, Re
[2024] EWHC 1438 (Ch)
Project Lietzenburger Strasse HoldCo SARL, Re
1 November 2023
[2023] EWHC 2849 (Ch)
High Court
A company facing a huge debt problem wants to restructure to avoid bankruptcy. A judge agreed to let them hold meetings to vote on the plan, even though some people complained about not enough time to prepare. The judge will make a final decision later.
Key Facts
- •Project Lietzenburger Strasse HoldCo S.à.r.l. (Plan Company) applied to convene creditor meetings for a restructuring plan under Part 26A of the Companies Act 2006.
- •The Plan Company is a Luxembourg-incorporated holding company, recently moving its COMI to England.
- •The Plan addresses over €1 billion in secured debt for a German real estate development project facing cost overruns and halted construction.
- •The plan involves restructuring debt, releasing out-of-the-money debt, and securing new financing.
- •The alternative to the plan is formal insolvency proceedings for the Group.
- •Short notice (16 days) was given for the convening hearing, raising concerns from some creditors.
- •Over 89% of senior creditors support the plan via lock-up or standstill agreements.
- •The court considered potential jurisdictional roadblocks, class composition issues, and the adequacy of notice given.
Legal Principles
Adequacy of notice for convening hearings is fact-sensitive, considering complexity, urgency, creditor sophistication, etc.
Practice Statement and case law
At the convening hearing, the court considers notice, jurisdictional conditions (Section 901A), and class meeting propriety; merits and fairness are for the sanction hearing.
Practice Statement and Section 901C(1) Companies Act 2006
In a Part 26A plan, it's not necessary to offer consideration to out-of-the-money creditors.
Re Prezzo InvestCo Limited [2023] EWHC 1679 (Ch)
International elements (sufficient connection, international effectiveness) affect the court's discretion to sanction, not jurisdiction itself.
Re ColourOz Investment 2 LLC [2022] BCC 926
Consent fees, elevation provisions, backstop fees, structuring fees, and interim facilities are considered for their potential to fracture creditor classes.
Various cases cited, including ED&F Man Holdings Limited [2022] EWHC 433 (Ch) and Re Haya Holdco 2 Plc [2022] EWHC 1079 (Ch)
Outcomes
The court convened the three plan meetings.
Despite concerns about short notice, the court found that adjourning would be unproductive and that a sanction hearing could be accommodated in late January/early February 2024. The court also found a prima facie case for jurisdiction and appropriate class composition.