- Excluded creditors and non-voting creditors no bar to scheme sanction (Re Obrascón Huarte Lain)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Restructuring & Insolvency analysis: The court sanctioned an uncontested Part 26 scheme in respect of a Spanish holding company, prior to a homologación judicial in the company’s home jurisdiction (Spain). The effect of the scheme was to reduce the company’s liabilities owed on certain notes to 88% of their face value. The scheme received overwhelming support from the scheme creditors who voted, and was also supported by scheme creditors who missed the deadline to vote. The scheme was part of a wider restructuring, which saw some 44% of the holders of the relevant notes not participate in the scheme, but who instead entered into a separately negotiated debt-for-equity swap, the effect of which was to greatly reduce the company’s leveraged status. Written by Samuel Parsons, barrister at Guildhall Chambers.
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