Vol 18 (2021) - Issue 6

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The Sunbird and Port Finance Schemes: Judicial Intervention and Pragmatism in Improving Information Provision to Scheme Creditors

Synopsis
Over the past year the High Court has subjected schemes of arrangement proposed under Part 26 (and restructuring plans under Part 26A) of the Companies Act to increased scrutiny. In particular, judges have focused on the quality and quantity of information given to scheme creditors, access to that information and the time given to both scheme creditors and the Court to analyse it.
The number of restructurings going through the Courts is expected to increase as the economic impact of COVID-19 continues to unfold and government support measures are withdrawn. The availability of crossclass cramdown via the Part 26A restructuring plan, has increased the probability of a company proposing a restructuring that is opposed by one or more classes of its affected creditors. The cases of Re Sunbird Business Services Limited1 (in respect of both attempts to obtain sanction) and Re Port Finance Investment Limited 2 provide timely examples to companies, creditors and advisers of the rigour that will be applied to test both a proposed scheme and any opposition to it.