Haynes Boone Partner Michael Mulligan and Associate Charlotte Mullis authored an article for Issue 15 of the Disputes Magazine detailing restructuring plans.
Read an excerpt below.
We predicted ground-breaking cases for restructuring plans as they evolve alongside parallel proceedings in various jurisdictions, and 2024 has not disappointed. Only this week, Thames Water, Britain’s biggest water supplier, has launched a restructuring plan to address its US$19.6 billion of debt with the sanction hearing anticipated to take place in January 2025.
In this article, we discuss the lessons learned after a raft of restructuring plan decisions from the English court this year including the Court of Appeal’s landmark decision in Adler, a German property group.
What Is A Restructuring Plan?
Restructuring plans have been available since June 2020 and enable a company to propose a compromise or arrangement to its creditors that can bind secured creditors, unsecured creditors, dissenting creditors and compromise members’ rights.
A restructuring plan does not necessarily need to be approved by all of the creditors so can be a useful option when dissenting creditors that are not ‘in the money’ are preventing a consensual restructuring or other formal compromise arrangement. Because the creditors do not vote together, but in classes, even large individual debts cannot block a restructuring plan where the relevant conditions are met.
To read the full article in Disputes Magazine, click here.
