Formulating an informal restructuring plan

Informal restructuring deals may use a combination of informal methods combined with more formal methods to bind dissenting parties, including:

1. •

   Schemes of arrangement

2. •

   formal Part 26A restructuring plan (see Practice Note: Part 26A restructuring plans: history, rationale and scope)

3. •

   pre-pack administrations

4. •

   company voluntary arrangements (CVAs)

5. •

   US Chapter 11 proceedings

Informal restructuring rationale

Once a valuation of the company or group has been obtained showing where value breaks (see Practice Note: Where the value breaks and negotiating strength), you will see who has a seat at the restructuring negotiating table and any dissenters will soon emerge, most likely challenging the basis of the valuation. If the dissenters are close to where value breaks and the creditors who are 'in the money' are unwilling to offer them a small piece of equity in the restructured vehicle or other incentive to obtain their consent to an informal restructuring, one of the more formal methods is often used.

Part 26 Schemes of arrangement

Schemes