Court of Appeal sets aside sanction of unfair Restructuring Plans (Saipem v Petrofac)
Restructuring & Insolvency analysis: In this important judgment in the fast-developing restructuring plan jurisdiction under Part 26A of the Companies Act 2006 (CA 2006), the Court of Appeal set aside a decision of the High Court from Mr Justice Marcus Smith) to sanction two linked restructuring plans on the ground that, because of excessive projected returns to the providers of new money to the restructured group, the benefits preserved or generated by the plans were not fairly shared between plan creditors. The Court dismissed a second ground of appeal pursued by the opposing plan creditors, under which it was argued that, on the facts, the ‘no worse off’ test under CA 2006, s 901G(3) (‘Condition A’) was not satisfied because, commercially, as a consequence of the Plan Companies going into liquidation, the opposing creditors would benefit from the loss of a competitor. Written by Yasseen Gailani, partner, Quin Emanuel Urquhart & Sullivan UK LLP.