Madagascar Oil Ltd, Re [2025] EWHC 2129 (Ch) (15 August 2025)

Madagascar Oil Ltd, Re [2025] EWHC 2129 (Ch) (15 August 2025)

The court sanctioned the restructuring plan, finding that MOL met the statutory requirements under Part 26A Companies Act 2006. The plan was approved by the BMK class and not by Outrider, but the court was satisfied that Outrider would be no worse off under the plan than in the relevant alternative (liquidation), where Outrider would receive only a nominal dividend. The allocation of value and treatment of Outrider was justified given the new money provided by BMK and the commercial realities. The plan's releases and new money provisions were permissible and fair. Outrider's objections did not establish unfair prejudice or a defect in the plan.

Citation
[2025] EWHC 2129 (Ch)
Parties
Claimant / Plan Company: Madagascar Oil Limited; Creditor / Respondent: Outrider Master Fund LP
Jurisdiction
England and Wales
Judgment Date
15 August 2025
Procedural Posture
Part 26 a Companies Act 2006 Restructuring Plan Sanction Application / Sanction Hearing and Final Judgment
Outcome
Plan sanctioned; application granted.
Legal Topics
Restructuring Plan, Cross Class Cram Down, Relevant Alternative, Fairness of Plan, No Worse Off Test, Third Party Releases, New Money Provision
Insolvency Company Law Restructuring Plan Cross Class Cram Down Relevant Alternative Fairness of Plan No Worse Off Test Third Party Releases +1 more

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Parties

Madagascar Oil Limited

Claimant / Plan Company

Outrider Master Fund LP

Creditor / Respondent

Procedural Posture

Part 26 a Companies Act 2006 Restructuring Plan Sanction Application / Sanction Hearing and Final Judgment

Legal Issues

  1. 1 Whether the proposed restructuring plan under Part 26A Companies Act 2006 should be sanctioned, including cross-class cram down of dissenting creditor (Outrider)
  2. 2 Whether Outrider is 'no worse off' under the plan than in the relevant alternative (liquidation)
  3. 3 Whether the plan is fair and the allocation of restructuring benefits is justified

Ratio Decidendi

The court sanctioned the restructuring plan, finding that MOL met the statutory requirements under Part 26A Companies Act 2006. The plan was approved by the BMK class and not by Outrider, but the court was satisfied that Outrider would be no worse off under the plan than in the relevant alternative (liquidation), where Outrider would receive only a nominal dividend. The allocation of value and treatment of Outrider was justified given the new money provided by BMK and the commercial realities. The plan's releases and new money provisions were permissible and fair. Outrider's objections did not establish unfair prejudice or a defect in the plan.

Court Disposition

Plan sanctioned; application granted.

Orders

  • The restructuring plan under Part 26A Companies Act 2006 is sanctioned.
  • The releases and compromises set out in the plan are approved and binding on all affected creditors, including Outrider.