This Practice Note looks at the eligibility criteria for restructuring plans under Part 26A of the Companies Act 2006 (CA 2006)(RPs), including eligible types of company, the application to foreign companies and other entities, the requirements of Condition A (the financial condition) and Condition B (the need for a compromise or arrangement), and who can apply. Types of company The availability of an RP is not dependent on the company’s size or turnover; this is in line with the view expressed in the government’s response (August 2018) to the earlier consultation that the RP should be available to all companies—a smaller company may better effect a rescue via an RP than by using a company voluntary arrangement (CVA). Our Market Trends report (see News Analysis: Market Insights Trend Report—trends in Part 26A restructuring plans in 2024) also shows that RPs can be used for companies across a wide range of industries. However: • it is expected that regulations will be made to exclude ‘insurers and credit institutions’ from its ambit—the Secretary of State may introduce regulations

This Checklist sets out practical issue-spotting points for landlords faced with a Part 26A restructuring plan affecting lease liabilities. It covers immediate steps and checks, information requests, class composition and voting, the relevant alternative and no-worse-off analysis, fairness, allocation of restructuring benefits and negotiation strategy, including where cross-class cram down may affect landlord creditors. It is not intended to be a definitive list of actions to be carried out, but will help with an initial assessment and issue spotting. Restructuring plans under Part 26A of the Companies Act 2006 allow companies which are struggling financially to implement a compromise or arrangement with their creditors, their members or both, in order to ‘eliminate, reduce, prevent or mitigate the adverse effect [of the financial difficulties] on a company’s ability to carry on business as a going concern’. Restructuring plans have been used by debtors to restructure lease liabilities. Landlords who receive notice of a proposed restructuring plan affecting lease liabilities should act quickly. Restructuring plan timetables can be compressed, and objections and challenges are more likely to

Potential grounds for challenge Dissenting creditors or shareholders/members have challenged a significant number of restructuring plans (RPs) since their introduction in Part 26A of the Companies Act 2006 (CA 2006). This is not surprising given a key feature of the RP is allowing the court to exercise the cross class cram-down (CCCD) power against a dissenting class provided the relevant conditions are satisfied (see Practice Note: Cross-Class Cram Down under a Part 26A restructuring plan). It is highly likely that future RPs will continue to be challenged. As the RP is an extremely flexible tool leaving much to the imagination of those formulating it, the grounds on which an RP may be attacked will differ greatly depending on how the particular RP has been cast and the surrounding circumstances, particularly the events leading up to the commencement of the court process to sanction the RP. Full details of challenges raised in all RPs heard to date are set out in our Deal Debrief series (see Practice Note: Part 26A restructuring plan deal

Key steps and timetables The restructuring plan (RP) process largely mirrors that used in schemes: For cases where Cross Class Cram-Down (CCCD) or valuation issues are likely to be contested, or where valuation experts need to be cross-examined, it is prudent to notify the court at the convening hearing stage and to allow sufficient time to be factored into the court time table to allow proper consideration of the matters by both the parties affected and the court. While the court notes that it is not possible nor necessary for a distressed company to negotiate bilaterally with each affected creditor, proper attempts should be made to negotiate at least with those with the most exposure (see Poundland (sanction) and News Analysis: Cross-class cramdown successfully used against nine dissenting classes(Re Poundland)). Snowden LJ in the Court of Appeal in Re AGPS BondCo plc; sub nom Strategic Value Capital Solutions Master Fund LP v AGPS BondCo plc (referred to here as Adler) cautioned that the court’s willingness to decide cases quickly to assist companies in

Need for valuations The valuation test is key for determining (i) the fairness of a restructuring plan (RP) which is being crammed down onto dissenting classes using cross-class cramdown (CCCD) and (ii) the impact of the relevant alternative on creditors/members if the RP is not agreed. When creating the RP tool under the Corporate Insolvency and Governance Act 2020 (CIGA 2020), the government recognised that valuations are often a very contentious area in any restructuring (see Practice Notes: Types of valuation for R&I lawyers and Where the value breaks and negotiating strength). The approach is intended to achieve the best possible balance between protecting creditors’ interests and avoiding disputes. In practice, the government believed that in many cases the process of dialogue and negotiation between the company and its creditors would serve to narrow differences on the perceived value of the company to the point where such challenges can be avoided. The government’s objective is to minimise the likelihood of challenge so far as is possible, while providing the underlying

Part 26A restructuring plans have been available since 26 June 2020 (see Practice Notes: Part 26A restructuring plans: history, rationale and scope and Frequently asked questions (FAQs) on the restructuring plan). For a detailed analysis of key metrics from the RPs filed in 2024 and commentary from leading lights in the restructuring world, see News Analysis Market Insights Trend Report—trends in Part 26A restructuring plans in 2024. Case tracker Some of the key Part 26A restructuring plan (RP) cases considered by the courts in England (and Scotland) include the following (the most recent appearing first): Company name(s) Date(s) of judgment(s)/hearing(s) Judge(s) Key points considered Further reading TG Jones High Street Ltd and Re TG Jones Retail Holdings Ltd  5 August 2026 Mr Justice Hildyard Time-tabling: When it came to the sanction hearing, Hildyard J was unable to give an instant decision when the hearing concluded given the complexity involved and took time to consider various factors before granting sanction later that day in a short form judgment (followed by a fuller judgment).

Part 26A restructuring plans have been available since 26 June 2020 under the Corporate Insolvency and Governance Act 2020 (CIGA 2020). Their implementation is supported by the relevant Practice Statement (see Practice Note: The Practice Statement for Part 26 schemes and Part 26A restructuring plans (2025)) and the Explanatory Notes prepared by the Department for Business, Energy and Industrial Strategy (now known as the Department for Business, Innovation, Science and Trade). The Part 26A restructuring plan provisions are a permanent change to the UK’s restructuring and insolvency laws and a welcome addition to its toolkit. What are the practical implications? The Part 26A restructuring plan gives struggling companies which have viable underlying businesses the tools needed to secure a rescue. The Part 26A restructuring plan allows a company to bind all creditors, including junior (or senior) classes of creditors even if they vote against the plan, through the use of a cross-class cram down (CCCD) provision. Such cram down can be imposed provided dissenting classes of creditors are no worse off than they would be in

A Part 36 offer is a settlement offer made under Part 36 of the CPR which, if made in accordance with those provisions and depending on the circumstances of its acceptance or rejection, can afford costs consequences, both advantageous and adverse.

This Practice Note considers the application of CPR 36 where Part 36 offers are made to settle detailed assessment proceedings commenced under CPR 47. It considers case law on the 10% uplift for claimant costs under CPR 36.17(4)(d) and the relationship between CPR 36 as well as the cap on provisional assessment costs under CPR 47.15(5). Note, in respect of solicitor/own client assessments, the consequences under CPR 36.17(4)(d) do not apply where there has been a successful Part 36 offer as this has been held to be inconsistent with section 70(9) of the Solicitors Act 1974 (SA 1974) which provides for the one-fifth rule unless there are special circumstances under SA 1974, s 70(10). However, it has been held that a successful Part 36 offer in solicitor/own client assessment proceedings can be treated as an admissible offer under the court’s general discretion if the automatic consequences under SA 1974, s 70(9) do not apply. For further information on solicitor/own client costs assessments generally, see: Solicitor and client costs—overview. Note, this Practice Note

ARCHIVED: this archived Practice Note is not maintained and is for background information purposes only. Further, some of the links may not direct you to the provisions as at the date the guidance in this Practice Note was published. Key Part 36 cases 2016—what do you need to know? Notwithstanding that the revised Part 36 came into force just over 18 months ago and was intended to help some of the problems of interpretation of a code aimed at encouraging settlement (and therefore reducing court time) issues with Part 36 continue and the year of 2016 is no exception. In this review of Part 36 decisions in 2016, we consider: • CPR 36.17(5)(e) and 'genuine attempts to settle' (Jockey Club v Willmott Dixon)—see below • the meaning of 'costs' in CPR 36.17(4)(b) (Webb v Liverpool Women's NHS Foundation Trust)—see below • the relationship between Part 36 offers and the common law of offer, counter-offer, acceptance and rejection (DB UK Bank v Jacobs)—see below • how interest

Restructuring & Insolvency analysis: The High Court has held that CPR 36 is applicable in applications made in insolvency proceedings through the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, r 12.1. Reliance on the proceedings being labelled ‘adversarial’ or ‘non-adversarial’ was an unsatisfactory basis on which to determine the applicability of Part 36–although the UK administrators’ application here was phrased in a ‘seeking directions’ manner, they had adopted a stance against which the opposing administrator had taken a contrary position. There was no case for removing the availability of Part 36 merely because of the form in which the administrators decided to bring the matter before court. Written by Alan Bennett, partner, and Laura Wiles, trainee solicitor, in the Restructuring and Insolvency team at Womble Bond Dickinson.

This Checklist considers Part 36 costs consequences to include the different costs consequences which apply to claimants and defendants following judgment under CPR 36.17. Note, this Checklist does not apply to the specific Part 36 provisions which apply only to fixed costs cases. For further information on the Part 36 consequences for fixed costs cases that are issued on or after 1 October 2023, see Practice Note: Part 36 offers—fixed costs (position on or after 1 October 2023). For a tabular summary of the key Part 36 decisions, see Practice Note: Part 36—illustrative decisions (from 2024 onwards). Scenario Guidance Part 36 offers made pre-action A Part 36 offer can be made at any time, including before the commencement of court proceedings (CPR 36.7(1)). Where a Part 36 offer is being made by the claimant, provision should be made for the defendant to pay the claimant’s costs to include the claimant’s pre-action costs, even if settlement is reached before court proceedings are commenced. If the defendant fails to pay either the agreed sum of money or costs (or