Fitness First Clubs Ltd, Re [2023] EWHC 1699 (Ch) (29 June 2023)

Fitness First Clubs Ltd, Re [2023] EWHC 1699 (Ch) (29 June 2023)

The Plan satisfies the statutory conditions for cross-class cram down under s.901G Companies Act 2006; the relevant alternative is administration with a pre-pack sale, in which dissenting landlord creditors are out of the money and would be no worse off than under the Plan; the Plan is fair, creditors were fairly represented, and the Company has discharged its evidential burden. The Plan is sanctioned.

Citation
[2023] EWHC 1699 (Ch)
Parties
Applicant/plan Company: Fitness First Clubs Limited; Opposing Creditor (class B1 Landlord): Lazari Properties 1 Limited; Opposing Creditor (class B2 Landlord, HL Landlords): Daejan Investments Limited; Opposing Creditor (class B2 Landlord, HL Landlords): Crown Estate; Opposing Creditor (class B2 Landlord, HL Landlords): Vanquish Properties GP Nominee 3 Limited; Opposing Creditor (class B2 Landlord, HL Landlords): Vanquish Properties GP Nominee 4 Limited; Creditor (vat Liability): HMRC; Primary Secured Creditor: Ms. Jayne Alison Best
Jurisdiction
England and Wales
Judgment Date
29 June 2023
Procedural Posture
Restructuring Plan Sanction Application (companies Act 2006, Part 26 A) / Sanction Hearing, Post Creditor Meetings
Outcome
Plan sanctioned; cross-class cram down applied; application granted.
Legal Topics
Restructuring Plan, Cross Class Cram Down, Creditor Rights, Sanction of Arrangement, Relevant Alternative, Guarantee Variation
Insolvency Company Law Restructuring Plan Cross Class Cram Down Creditor Rights Sanction of Arrangement Relevant Alternative Guarantee Variation

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Parties

Fitness First Clubs Limited

Applicant/plan Company

Lazari Properties 1 Limited

Opposing Creditor (class B1 Landlord)

Daejan Investments Limited

Opposing Creditor (class B2 Landlord, HL Landlords)

Crown Estate

Opposing Creditor (class B2 Landlord, HL Landlords)

Vanquish Properties GP Nominee 3 Limited

Opposing Creditor (class B2 Landlord, HL Landlords)

Vanquish Properties GP Nominee 4 Limited

Opposing Creditor (class B2 Landlord, HL Landlords)

HMRC

Creditor (vat Liability)

Ms. Jayne Alison Best

Primary Secured Creditor

Procedural Posture

Restructuring Plan Sanction Application (companies Act 2006, Part 26 A) / Sanction Hearing, Post Creditor Meetings

Legal Issues

  1. 1 Whether the statutory conditions for cross-class cram down under section 901G Companies Act 2006 are satisfied
  2. 2 Whether dissenting landlord creditors are 'out of the money' in the relevant alternative
  3. 3 Whether the Plan provides fair distribution and treatment among creditor classes

Ratio Decidendi

The Plan satisfies the statutory conditions for cross-class cram down under s.901G Companies Act 2006; the relevant alternative is administration with a pre-pack sale, in which dissenting landlord creditors are out of the money and would be no worse off than under the Plan; the Plan is fair, creditors were fairly represented, and the Company has discharged its evidential burden. The Plan is sanctioned.

Court Disposition

Plan sanctioned; cross-class cram down applied; application granted.

Orders

  • Restructuring Plan between Fitness First Clubs Limited and Plan Creditors sanctioned under Part 26A Companies Act 2006.
  • Plan binds dissenting landlord creditor classes (B1, B2, B3, C, D) despite lack of requisite majority.