Part 26A restructuring plans (RPs) have been available since June 2020 following their introduction under the Corporate Insolvency and Governance Act 2020 which introduced a new section into the Companies Act 2006 (CA 2006). Post Brexit, they are an important part of the restructuring toolkit and have seen an exponential growth, with valued guidance being issued by the courts.
In June 2023, the Insolvency Service noted several areas where further consultation may be beneficial on RPs including: (i) exploration of whether the financial burden could be eased (to reduce the costs associated with setting up and challenging an RP) (ii) a lead company concept with jurisdiction extending to affiliated companies (iii) mandatory upside sharing (ie creditors to receive a share of future profit should the rescue be successful). The Insolvency Service also recommended further guidance to help improve trust and transparency with the process to avoid the information asymmetry which exists between the company and challenging creditors/other parties (see para [4.18]) (see: LNB News 28/06/2023 41 and News Analysis: CIGA turns three).
From 1 January 2026, the revised Practice Statement for schemes and RPs 2025
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