Vol 21 (2024) - Issue 2

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Adler – The Court of Appeal

Synopsis
There is a wealth of case law on schemes of arrangement under Part 26 of the Companies Act 2006 ('CA06') and, as Part 26A was modelled on the Part 26, the courts when considering restructuring plans have been able to draw the authorities concerning schemes.
There is, however, a fundamental difference between schemes and restructuring plans in that the latter provides for cross class cramdown, thereby enabling the imposition of a transaction on a dissenting class. That fundamental difference has given rise to questions as to how the principles established in the scheme context are to be applied to restructuring plans, but until now such issues had only been considered at first instance.
The Court of Appeal's decision in Re AGPS Bondco Plc [2024] EWCA 24 ('Adler') marks the first time a restructuring plan under Part 26A of the Companies Act 2006 has been considered at that level. The decision, which emphasises both the similarities and the differences between schemes and plans, provides some welcome clarity as to whether (and to some extent how) principles should be applied in the restructuring plan context. This guidance will assist companies considering proposing a plan and creditors considering challenging one alike.