Approving schemes of arrangement—micro returns for creditors of micro credit provider (Re Provident SPV Ltd)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Notice
• Jurisdiction
• Class composition issues
• Obstacles to approval
• Case details

Article summary

Restructuring & Insolvency analysis: The court was considering a scheme of arrangement that would only provide a few pennies in the pound to creditors. It was accepted that issues of whether the scheme should be approved were properly reserved for the sanction hearing. However, the judge noted that even where the scheme had been approved at the creditors’ meeting, the court would retain a final say over approval. The judge noted that the court would have to be convinced, in the exercise of its unfettered discretion in relation to approval, that the scheme ‘is one which an intelligent and honest class member, acting according to his or her interests as such, could reasonably approve…’ (para [45]). Written by Lauren Godfrey, barrister at Gatehouse Chambers.