Vol 21 (2024) - Issue 2

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Cross-Class Cram down under Part 26A Restructuring Plan: Lessons from GAS, Nasmyth and Prezzo

Synopsis
The advent of the Part 26A Restructuring Plan introduced by the Corporate Insolvency and Governance Act 2020 ushered in a new era in the UK corporate insolvency landscape. Designed as a versatile instrument to facilitate business restructuring, it serves as an effective tool to bind all creditors (including dissenting classes of creditors) by allowing cross-class cram down, a feature that was previously unavailable under the UK regime. One of the areas that has attracted a lot of interest amongst the market participants is cram down of HMRC as a dissenting creditor. Recent cases of GAS, Nasmyth and Prezzo throw some light on the evolving rubric on when the courts will be convinced in reaching the conclusion to cram down HMRC. This article examines the courts approach and the takeaways from each of the recent cases.