Fossil secures court approval for innovative UK restructuring plan (Re Fossil (UK) Global Services Ltd)
Restructuring & Insolvency analysis: The High Court sanctioned the restructuring plan of Fossil (UK) Global Services Ltd under Part 26A of the Companies Act 2006 (CA 2006) (the ‘Plan’), following near‑unanimous approval (99.99% by value) from a single class of noteholders, comprising both retail and wholesale creditors. Mr Justice Richards applied the four‑stage test set out by Lord Justice Snowden in Re AGPS Bondco Plc (‘Adler’): (i) whether the statutory requirements were satisfied, (ii) whether the class was fairly represented and voted bona fide in the interests of the class, (iii) whether the plan was fair and could reasonably have been approved (the so‑called ‘limited rationality test’), and (iv) whether any legal ‘blot’ or defect existed. The court placed particular emphasis on the quality and accessibility of information provided to retail creditors, noting that the involvement of an independent Retail Advocate helped ensure that they were properly informed and adequately represented throughout the process. Concerns regarding the participation rights of ‘New‑Money’ providers and the appropriateness of a single class were considered and rejected, with the judge satisfied that all creditors were better off under the Plan than under the relevant alternative. No defects were identified, and expert evidence supported the conclusion that the Plan would likely be recognised in the US, thereby ensuring its cross‑border effectiveness. Written by Brian Rostron, associate at Addleshaw Goddard LLP.