Vol 15 (2018) - Issue 6

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Estimating Outcomes: Lessons from the House of Fraser Scheme of Arrangement

Synopsis
The recent House of Fraser scheme of arrangement raised interesting new considerations in relation to class composition and estimated outcome statements. A difference in interest rates where the return to creditors on insolvency was expected to be high could be sufficiently material to prevent those creditors from consulting together with a view to their common interest even where, if the anticipated return was lower, they could have done so. The case further demonstrates the importance of the scheme company obtaining reliance on any estimated outcome statements that form part of the evidence submitted to court.

Introduction
This article discusses points of interest arising from the judgment of Birss J handed down at the convening hearing for the English scheme of arrangement proposed by House of Fraser. The article does not deal with the parallel and interconditional Scottish scheme.