Gategroup Guarantee Ltd, Re [2021] EWHC 304 (Ch) (17 February 2021)

Gategroup Guarantee Ltd, Re [2021] EWHC 304 (Ch) (17 February 2021)

The bankruptcy exclusion in the Lugano Convention applies to restructuring plans under Part 26A of the Companies Act 2006, so the English court has jurisdiction to convene meetings of creditors despite exclusive jurisdiction clauses in the Bonds. Adequate notice was given to creditors, threshold conditions are satisfied, and class composition is appropriate.

Citation
[2021] EWHC 304 (Ch)
Parties
Applicant Company: Gategroup Guarantee Limited; Objector (withdrew Opposition): Hestia Investments Designated Activity Company
Jurisdiction
England and Wales
Judgment Date
17 February 2021
Procedural Posture
Restructuring Plan Convening Application / Judgment on Convening Creditors' Meetings
Outcome
Order made to convene meetings of two classes of creditors to consider the restructuring plan.
Legal Topics
Restructuring Plan, Jurisdiction, Notice to Creditors, Class Composition, Cross Class Cram Down
Insolvency Company Law Restructuring Plan Jurisdiction Notice to Creditors Class Composition Cross Class Cram Down

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Parties

Gategroup Guarantee Limited

Applicant Company

Hestia Investments Designated Activity Company

Objector (withdrew Opposition)

Procedural Posture

Restructuring Plan Convening Application / Judgment on Convening Creditors' Meetings

Legal Issues

  1. 1 Whether the court has jurisdiction to convene meetings for a restructuring plan under Part 26A of the Companies Act 2006 given the Lugano Convention and exclusive jurisdiction clauses
  2. 2 Adequacy of notice to creditors
  3. 3 Satisfaction of threshold conditions for Part 26A plans

Ratio Decidendi

The bankruptcy exclusion in the Lugano Convention applies to restructuring plans under Part 26A of the Companies Act 2006, so the English court has jurisdiction to convene meetings of creditors despite exclusive jurisdiction clauses in the Bonds. Adequate notice was given to creditors, threshold conditions are satisfied, and class composition is appropriate.

Court Disposition

Order made to convene meetings of two classes of creditors to consider the restructuring plan.

Orders

  • Meetings of Senior Lenders and Bondholders to be convened to consider and, if thought fit, approve the restructuring plan under section 901C of the Companies Act 2006.
  • Plan Company to provide adequate notice and documentation for creditor meetings.