Houst Ltd, Re [2022] EWHC 1941 (Ch) (22 July 2022)

Houst Ltd, Re [2022] EWHC 1941 (Ch) (22 July 2022)

The court sanctioned the restructuring plan under Part 26A Companies Act 2006, exercising the cross-class cram-down power because the statutory conditions were satisfied: HMRC (the dissenting class) would be no worse off under the plan than in the relevant alternative, the Bank (an in-the-money class) approved the plan, and the plan was fair in its distribution of benefits, justified by the need for new capital and continued trading. HMRC's objection was policy-based, not case-specific, and they did not oppose at the hearing.

Citation
[2022] EWHC 1941 (Ch)
Parties
Applicant Company: Houst Limited; Secured Creditor: Clydesdale Bank Plc; Secondary Preferential Creditor: HMRC; Trade Creditor (objector): Laundryheap; Loan Holders: Convertible Loan Note Holders; Connected Creditor: Connected Creditor; Members: Shareholders (Ordinary and Series A)
Jurisdiction
England and Wales
Judgment Date
22 July 2022
Procedural Posture
Application to Sanction Restructuring Plan Under Part 26 a Companies Act 2006 / Sanction Hearing
Outcome
Restructuring plan sanctioned
Legal Topics
Restructuring Plan, Cross Class Cram Down, Scheme of Arrangement, Creditors' Rights, Companies Act 2006 Part 26 a
Insolvency Company Law Restructuring Plan Cross Class Cram Down Scheme of Arrangement Creditors' Rights Companies Act 2006 Part 26 a

Case Brief

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Parties

Houst Limited

Applicant Company

Clydesdale Bank Plc

Secured Creditor

HMRC

Secondary Preferential Creditor

Laundryheap

Trade Creditor (objector)

Convertible Loan Note Holders

Loan Holders

Connected Creditor

Connected Creditor

Shareholders (Ordinary and Series A)

Members

Procedural Posture

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

Legal Issues

  1. 1 Whether the restructuring plan should be sanctioned under Part 26A Companies Act 2006
  2. 2 Whether cross-class cram-down power under s.901G should be exercised
  3. 3 Whether dissenting class (HMRC) is no worse off under the plan than in the relevant alternative

Ratio Decidendi

The court sanctioned the restructuring plan under Part 26A Companies Act 2006, exercising the cross-class cram-down power because the statutory conditions were satisfied: HMRC (the dissenting class) would be no worse off under the plan than in the relevant alternative, the Bank (an in-the-money class) approved the plan, and the plan was fair in its distribution of benefits, justified by the need for new capital and continued trading. HMRC's objection was policy-based, not case-specific, and they did not oppose at the hearing.

Court Disposition

Restructuring plan sanctioned

Orders

  • The restructuring plan under Part 26A Companies Act 2006 in respect of Houst Limited is sanctioned.
  • The plan is binding on all creditors and members as set out in the plan.