Petrofac Ltd, In the Matter Of [2025] EWHC 1250 (Ch) (20 May 2025)

Petrofac Ltd, In the Matter Of [2025] EWHC 1250 (Ch) (20 May 2025)

The relevant alternative to the Plan is a group-wide liquidation, not a variant restructuring (Plan B). The Plan provides a better direct financial outcome to all creditors, including Saipem and Samsung, than liquidation. Indirect economic benefits to dissenters from Petrofac's liquidation as a competitor are not relevant to the 'no worse off' test under section 901G. The Plan is fair in its allocation of benefits and justified in its treatment of creditor classes. The statutory and discretionary requirements for cross-class cram-down are satisfied. The Plan is sanctioned.

Citation
[2025] EWHC 1250 (Ch)
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; Retail Investor Advocate: Retailer Investor Advocate
Jurisdiction
England and Wales
Judgment Date
20 May 2025
Procedural Posture
Restructuring Plan Sanction (companies Act 2006, Part 26 A) / Sanction Hearing Following Creditor Meetings
Outcome
Plan sanctioned with cross-class cram-down; applications granted.
Legal Topics
Restructuring Plan, Cross Class Cram Down, Relevant Alternative, No Worse Off Test, Class Composition, Judicial Discretion, Fairness in Restructuring
Insolvency Company Law Restructuring Plan Cross Class Cram Down Relevant Alternative No Worse Off Test Class Composition Judicial Discretion +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

Retail Investor Advocate

Procedural Posture

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

Legal Issues

  1. 1 What is the relevant alternative for the purposes of section 901G Companies Act 2006?
  2. 2 Are dissenting creditors (Saipem and Samsung) any worse off under the Plan than in the relevant alternative?
  3. 3 Should the court exercise its discretion to sanction the Plan, including cross-class cram-down, in light of fairness and allocation of restructuring benefits?

Ratio Decidendi

The relevant alternative to the Plan is a group-wide liquidation, not a variant restructuring (Plan B). The Plan provides a better direct financial outcome to all creditors, including Saipem and Samsung, than liquidation. Indirect economic benefits to dissenters from Petrofac's liquidation as a competitor are not relevant to the 'no worse off' test under section 901G. The Plan is fair in its allocation of benefits and justified in its treatment of creditor classes. The statutory and discretionary requirements for cross-class cram-down are satisfied. The Plan is sanctioned.

Court Disposition

Plan sanctioned with cross-class cram-down; applications granted.

Orders

  • The restructuring Plan for Petrofac Limited and Petrofac International (UAE) LLC is sanctioned under Part 26A Companies Act 2006.
  • Cross-class cram-down is approved over the dissenting classes (Saipem and Samsung Opposing Creditors).