Part 26 A restructuring plan: pension issues
Part 26 A restructuring plan: pension issues

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • Part 26 A restructuring plan: pension issues
  • What are the practical implications?
  • Notices to the Pensions Regulator/PPF
  • The PPF’s requirements
  • The PPF’s rights and voting
  • General impact on trustees

Section 7 of and Schedule 9 to the Corporate Insolvency and Governance Act 2020 (CIGA 2020) introduce a new Part 26A of the Companies Act 2006 (CA 2006)—Arrangements and Reconstructions for Companies in Financial Difficulty (a ‘restructuring plan’) from 26 June 2020 which is also supported by the Practice Statement (Companies: Schemes of Arrangement under Part 26 and Part 26A of the Companies Act 2006) (Practice Statement 2020) and the Explanatory Notes prepared by the Department for Business, Energy and Industrial Strategy.

What are the practical implications?

We have already seen several corporate failures around the world linked to coronavirus. The CIGA 2020 restructuring plan should give many struggling companies which have viable underlying businesses the tools needed and necessary breathing space to secure a rescue.

CIGA 2020 introduces a new restructuring procedure that allows a company to bind all creditors, including junior (or senior) classes of creditors even if they vote against the plan, through the use of a cross-class cram down (CCCD) provision. Such cram down can be imposed provided dissenting classes of creditors are no worse off than they would be in the relevant alternative (see Practice Note: Cross-Class Cram Down under a Part 26A restructuring plan). The classes of creditors will be proposed by the distressed company on a case-by-case basis. For a class to vote in favour, 75% of a class

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