Schemes of arrangement—process and statutory framework
Produced in partnership with Riccardo Alonzi and Jonathan Akinluyi of Skadden Arps Slate Meagher & Flom (UK) LLP
Schemes of arrangement—process and statutory framework

The following Restructuring & Insolvency guidance note Produced in partnership with Riccardo Alonzi and Jonathan Akinluyi of Skadden Arps Slate Meagher & Flom (UK) LLP provides comprehensive and up to date legal information covering:

  • Schemes of arrangement—process and statutory framework
  • Schemes of arrangement—definition and basis in statute
  • Meaning of compromise or arrangement
  • Jurisdiction
  • Obtaining a stay
  • Process

Schemes of arrangement—definition and basis in statute

A scheme of arrangement is a court-sanctioned compromise between a company and its creditors or members. The subject of a scheme of arrangement may cover anything that the company and its members or creditors would not otherwise be able to agree between themselves; the scheme process allows such a compromise to be implemented without the support of 100% of the interested parties.

The implementation of schemes of arrangement is governed by the Companies Act 2006 (CA 2006), Pt 26, ss 895–901, although almost identical sections have existed for well over 100 years within the companies legislation in various forms. While CA 2006 does not prescribe the process specifically, it defines the process indirectly by prescribing the requirements for the court to sanction a proposed scheme (Re Rodenstock).

It is mandatory to use electronic filing (e-filing) in all jurisdictions of the Rolls Building, which includes the Insolvency and Companies List (formerly the Bankruptcy and Companies Courts of the Chancery Division). It is no longer possible to issue claims or applications, or to file documents, on paper—instead all issuings and filings must be made online using the CE-File website. For further reading, see News Analysis: E-filing at the Rolls Building: some practical considerations for R&I lawyers. The extension of e-filing to the Business and Property Courts outside