Schemes of arrangement and restructuring plans—class issues


Produced in partnership with Jonathan Akinluyi of Latham & Watkins and Riccardo Alonzi at Burness Paull
Practice notes

Schemes of arrangement and restructuring plans—class issues


Produced in partnership with Jonathan Akinluyi of Latham & Watkins and Riccardo Alonzi at Burness Paull

Practice notes
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This Practice Note looks at the General Principles involved in determining class issues. For a more detailed look at what may or may not fracture a class in practice, see: Checklist of factors which may (and may not) fracture the class in a Scheme of Arrangement or restructuring plan.

Statute and Practice Statement

Part 26 of the Companies Act 2006 (CA 2006), which governs the scheme of arrangement (scheme) procedure and CA 2006, Pt 26A, which governs the restructuring plan (RP) procedure, requires the applicant to apply first for an order of the court convening the relevant meeting(s) of creditors or members or any class(es) to approve the proposed scheme/RP. The court will not have jurisdiction to sanction a scheme/RP at the subsequent sanction hearing if the meetings of the relevant classes of creditors and/or members (as applicable) have not been properly constituted. It is, therefore, vitally important to identify and compose the appropriate classes with due care.

Judges have found that the caselaw relating to

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Jurisdiction(s):
United Kingdom
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Key definition:
Schemes of arrangement definition
What does Schemes of arrangement mean?

A formal arrangement between the company and its creditors and/or its members (or a class of its creditors or members) pursuant to Part 26 of the Companies Act 2006 (CA 2006).

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