Consort Healthcare (Tameside) Plc, Re
[2024] EWHC 1438 (Ch)
Project Veronica Limited, Re
10 May 2024
[2024] EWHC 1261 (Ch)
High Court
A struggling restaurant group wants to restructure its debts. The judge checked if everyone was properly notified, if the court had the right to deal with the case, and if the plan was fair. No one objected, so the judge allowed the group to hold a meeting with its creditors to discuss the plan.
Key Facts
- •Project Verona Limited (the Company) seeks directions to summon a creditors' meeting for a restructuring plan under Part 26A of the Companies Act 2006.
- •The Company is a subsidiary of Tasty Plc, an AIM-listed group, and assumed liability for certain Group debts.
- •The Group's restaurant business faced challenges due to the Covid-19 pandemic and economic factors.
- •A secured loan from Mr. William Roseff helped avoid insolvency, convertible into Tasty Plc equity.
- •The Plan aims to exit unviable restaurants (Category B and C Sites) and focus on viable ones (Category A Sites).
- •The Plan proposes compromises with various creditor classes, including landlords and rating authorities, offering varying deals based on site viability.
- •A Restructuring Surplus Fund is created from future EBITDA increases and successful Covid-19 business interruption claims.
- •The Company argues the relevant alternative is Group administration, leading to Secured Creditor repayment but nothing for other creditors.
- •No Plan Creditor opposed the convening order.
Legal Principles
Adequacy of notice for Plan meetings and court hearings.
Practice Statement of 26 June 2020
Jurisdictional requirements for restructuring plans.
Companies Act 2006
Threshold conditions in section 901A of the Companies Act 2006 (financial difficulties and proposed compromise).
Companies Act 2006, section 901A
Class composition for creditors in restructuring plans, requiring similar rights to consult together.
Re Gategroup Guarantee Limited [2021] EWHC 304 (Ch); Sovereign Life Assurance v Dodd [1892] 2 QB 753
Fair distribution of restructuring benefits in cross-class cramdowns (Re AGPS Bondco Plc [2024] EWCA Civ 24).
Re AGPS Bondco Plc [2024] EWCA Civ 24
Outcomes
Order convening meetings of Plan Creditors granted.
Adequate notice given; jurisdiction established; conditions in section 901A met; class composition acceptable; no apparent roadblocks; no creditor opposition.