Gategroup Guarantee Ltd, Re [2021] EWHC 775 (Ch) (30 March 2021)

Gategroup Guarantee Ltd, Re [2021] EWHC 775 (Ch) (30 March 2021)

The court sanctioned the restructuring plan because all statutory requirements were met, the plan was fair and reasonable, the artificial co-obligor structure was justified and necessary, and the plan was likely to be effective in Switzerland and Luxembourg. The plan provided the only viable alternative to insolvency, which would be highly detrimental to creditors, and included mechanisms to ensure enforceability of amendments to the Bonds.

Citation
[2021] EWHC 775 (Ch)
Parties
Applicant Company: Gategroup Guarantee Limited; Creditors: Bondholders; Creditors: Senior Lenders
Jurisdiction
England and Wales
Judgment Date
30 March 2021
Procedural Posture
Restructuring Plan Sanction Application / Sanction Hearing Under Part 26 a Companies Act 2006
Outcome
Order sanctioning the restructuring plan granted
Legal Topics
Restructuring Plan, Scheme of Arrangement, Jurisdiction, Cross Border Insolvency, Recognition of Foreign Insolvency Proceedings
Insolvency Law Company Law Restructuring Plan Scheme of Arrangement Jurisdiction Cross Border Insolvency Recognition of Foreign Insolvency Proceedings

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Parties

Gategroup Guarantee Limited

Applicant Company

Bondholders

Creditors

Senior Lenders

Creditors

Procedural Posture

Restructuring Plan Sanction Application / Sanction Hearing Under Part 26 a Companies Act 2006

Legal Issues

  1. 1 Whether the court has jurisdiction to sanction the restructuring plan under Part 26A Companies Act 2006
  2. 2 Whether statutory requirements for convening and conducting creditor meetings were met
  3. 3 Whether the plan is fair and reasonable and not coercive to minority creditors

Ratio Decidendi

The court sanctioned the restructuring plan because all statutory requirements were met, the plan was fair and reasonable, the artificial co-obligor structure was justified and necessary, and the plan was likely to be effective in Switzerland and Luxembourg. The plan provided the only viable alternative to insolvency, which would be highly detrimental to creditors, and included mechanisms to ensure enforceability of amendments to the Bonds.

Court Disposition

Order sanctioning the restructuring plan granted

Orders

  • The restructuring plan under Part 26A Companies Act 2006 is sanctioned in respect of Gategroup Guarantee Limited.
  • The Company is appointed on behalf of the Bondholders to take necessary steps to implement the amendments and waivers to the Bond Terms.