Petrofac Limited & Anor, Re

Petrofac Limited & Anor, Re

The relevant alternative is liquidation, not a hypothetical improved plan. The 'no worse off' test is satisfied because dissenting creditors are not worse off in direct financial terms under the plan than in liquidation; indirect economic benefits (such as loss of a competitor) are too remote for this test. The allocation of preserved value, including enhanced returns for new money providers, is justified by the risk and necessity of new funding. The plan is fair and should be sanctioned.

Parties
Applicant/plan Company: Petrofac Limited; Applicant/plan Company: Petrofac International (UAE) LLC; Supporting Creditor: Ad Hoc Group; Dissenting Creditors: Saipem and Samsung Opposing Creditors; Other Party: Retailer Investor Advocate; Not Appearing: PL Insurance Restitutionary Claimants
Jurisdiction
England and Wales
Judgment Date
20 May 2025
Procedural Posture
Insolvency/restructuring Plan Sanction Application / Sanction Hearing and Judgment
Outcome
Plan sanctioned
Legal Topics
Restructuring Plan, Cross Class Cram Down, Sanction of Restructuring Plan, Relevant Alternative, No Worse Off Test, Class Composition, Fairness/discretion in Sanction
Insolvency Law Company Law Restructuring Plan Cross Class Cram Down Sanction of Restructuring Plan Relevant Alternative No Worse Off Test Class Composition +1 more

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Parties

Petrofac Limited

Applicant/plan Company

Petrofac International (UAE) LLC

Applicant/plan Company

Ad Hoc Group

Supporting Creditor

Saipem and Samsung Opposing Creditors

Dissenting Creditors

Retailer Investor Advocate

Other Party

PL Insurance Restitutionary Claimants

Not Appearing

Procedural Posture

Insolvency/restructuring Plan Sanction Application / Sanction Hearing and Judgment

Legal Issues

  1. 1 What is the relevant alternative for the purposes of section 901G Companies Act 2006?
  2. 2 Are dissenting creditors 'no worse off' under the plan than in the relevant alternative?
  3. 3 Should the court exercise its discretion to sanction the plan despite dissent?

Ratio Decidendi

The relevant alternative is liquidation, not a hypothetical improved plan. The 'no worse off' test is satisfied because dissenting creditors are not worse off in direct financial terms under the plan than in liquidation; indirect economic benefits (such as loss of a competitor) are too remote for this test. The allocation of preserved value, including enhanced returns for new money providers, is justified by the risk and necessity of new funding. The plan is fair and should be sanctioned.

Court Disposition

Plan sanctioned

Orders

  • The restructuring plan for Petrofac Limited and Petrofac International (UAE) LLC is sanctioned as proposed.
  • No adjournment of sanction hearing granted.