Vol 17 (2020) - Issue 6

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The First UK Restructuring Plan: Learning Points from Virgin Atlantic

Synopsis
Virgin Atlantic Airways Limited (the 'Company') recently became the first company to implement a restructuring plan under the new Part 26A of the UK Companies Act 2006 (the 'Act'). This represented a major first test of the new procedure introduced pursuant to the Corporate Insolvency and Governance Act 2020, effective 26 June 2020.
The most ground-breaking aspect of the new restructuring plan procedure is the possibility that the court may approve a plan even if not every stakeholder class has approved it ('cross-class cram-down'). However, cross-class cram-down was not engaged in this case, as each class approved the plan.
The Court approached the Company's plan in a manner very similar to that applicable to a conventional scheme of arrangement; there were no major surprises. However, the convening and sanction hearings illustrated a number of points which will inform emerging market practice in respect of the new plan.