Praesidiad Limited, Re
[2023] EWHC 2745 (Ch)
VTB Capital Plc (in administration), Re
1 July 2024
[2024] EWHC 1777 (Ch)
High Court
A bankrupt company wants to pay back its debts in a new way to make it faster and fairer, considering the impact of international sanctions. A judge approved this plan, confirming it's legal and that everyone will be treated equally, despite some complicated situations.
Key Facts
- •Application for a convening order under Part 26 of the Companies Act 2006 for VTB Capital plc (in administration).
- •Company placed into administration on 6th December 2003 due to sanctions imposed following the Russian invasion of Ukraine.
- •Administrators proposed a Scheme of Arrangement to improve and accelerate creditor distributions.
- •Scheme addresses difficulties caused by sanctions, including distributions to sanctioned individuals and realisation of assets trapped in Russia.
- •Scheme includes a trust for distributions to sanctioned creditors, a hotchpot arrangement to prevent external enforcement, and provisions for smaller claims.
- •Approximately 360 creditors, with around 200 having claims of £50,000 or less.
Legal Principles
Jurisdiction of the court to approve a Scheme of Arrangement that modifies Insolvency Rules.
Companies Act 2006, Part 26; Kempe Ambassador Insurance Co [1998] 1 BCLC 234; Re Lehman Brothers International (Europe) (In Administration) [2019] Bus.L.R. 1012; Re People's Energy (Supply) Limited [2024] EWHC 1367 (Ch)
Tests for determining appropriate classes of creditors in a Scheme of Arrangement.
Sovereign Life Assurance v Dodd [1892] 2 QB 573; Re Hawk Insurance Co Ltd [2001] 2 BCLC 480; Re UDL Holdings Ltd [2002] 1 HKC 172
Requirements for sufficient notice to creditors in a Scheme of Arrangement.
None explicitly stated, but derived from the court's consideration of the facts.
Outcomes
Convening order granted for a meeting of creditors to consider the Scheme of Arrangement.
The Scheme is plausible, potentially offering earlier and greater distributions than traditional administration or liquidation; jurisdiction is established; one class of creditors is deemed appropriate; sufficient notice provided; sanctions-related concerns addressed.