Court clarifies costs consequences of failed objections to Part 26A Restructuring Plans (Re Madagascar Oil Ltd)
Restructuring & Insolvency analysis: Restructuring plans under Part 26A of the Companies Act 2006 (CA 2006) are a relatively new feature of English corporate insolvency law, having been first introduced by the Corporate Insolvency and Governance Act 2020. A restructuring plan allows a financially distressed company to restructure its debt obligations, subject to approval by at least 75% of each relevant class of the company’s creditors and the court’s sanction. Alternatively, a company may apply to court for sanction of a plan even though one or more classes of creditors does not consent (known colloquially as a ‘cross-class cram down’). In such case, dissenting creditors may make submissions to court opposing approval of the plan. In Re Madagascar Oil Ltd, the High Court upheld a restructuring plan against the objections of a dissenting creditor. In a second consequential judgment on 7 November 2025, the judge considered whether the (unsuccessful) dissenting creditor should bear any part of the costs of the sanction proceedings. Affirming that the court should be guided by the same principles that apply to Part 26 schemes of arrangement, the judge held that costs will not generally be awarded against dissenting creditors if their objections are reasonable, but that the unreasonable conduct of the creditor in this case justified an award of costs on the indemnity basis. Written by Patrick Taylor, partner, Gavin Chesney, counsel, and Louis Norton, associate, of Debevoise & Plimpton LLP.