A scheme of arrangement (scheme) is a court-sanctioned compromise between a company and its creditors or members. The subject of a scheme may cover anything that the company and its members or creditors would not otherwise be able to agree consensually between themselves; the scheme process allows such a compromise to be implemented without the support of 100% of the interested parties. The implementation of a scheme is governed by sections 895–901 (Part 26) of the Companies Act 2006 (CA 2006). Benefits of schemes of arrangement Schemes are flexible arrangements which are often used in complex restructurings. The main benefits of schemes include: • there is no need to prove insolvency, so action can be taken early at the first signs of distress • dissenting creditors within a class can be crammed down if the scheme is approved by a majority in number representing at least ¾ in value of creditors (or members or any class of them) present and voting in person or by proxy • they can bind secured creditors (with the necessary

The City Code on Takeovers and Mergers (Code) was originally drafted without specific reference to schemes of arrangement, the Takeover Panel (Panel) applying the Code to schemes as and when particular issues arose. The increasing use of schemes in takeovers, amongst other things, led to the adoption in 2007 of Appendix 7 to the Code, which: • applies the Code as a whole to schemes of arrangement • disapplies those provisions of the Code which are not relevant to schemes, eg provisions relating to: ◦ acceptances and rights of withdrawal ◦ certain timing rules ◦ certain aspects of offer revision • makes specific rules on timing and announcement requirements, based around the dates for posting the scheme circular, the court meeting for shareholders and the court hearing • amends a number of Notes to particular Code Rules clarifying their application to schemes Definitions and expressions in the Code A number of provisions of the Code use terminology which is specific to a contractual offer, so that their application

Convening hearing Pursuant to section 896 of the Companies Act 2006 (CA 2006), the court may order a meeting of the creditors or class of creditors, or of the members or class of members, to be summoned in such manner as the court directs. An application for a meeting may be made by the company, any creditor or member of the company, or the liquidator or administrator of the company in the event it is being wound-up or is in administration. For any scheme that is proposed within 12 weeks of a moratorium under the Corporate Insolvency and Governance Act 2020 (CIGA 2020), the holders of any moratorium debts and pre-moratorium debts for which the company did not have a payment holiday during the moratorium have, in effect, a veto right in respect of the scheme as the court may not sanction the scheme if it includes provision in respect of such creditors without their consent (see Practice Note: Moratorium). Application must be made by issuing a Civil Procedure Rules 1998, SI

This Practice Note sets out certain key cases and associated relevant content in relation to schemes of arrangement. The cases are divided by topic area and include: • Class issues • Jurisdiction/sufficient connection issues • Valuation issues • Scheme meeting/voting and cram-down • Convening hearing/sanction hearing issues Class issues Names of parties Judgment date Case summary Relevant content Re Deutsche Glasfaser Group GMBH [2026] EWHC 1563 (Ch) 24 June 2026 Meeting adjourned: the scheme documents were subject to further amendments and circulated one day before the original date proposed for the scheme meeting; in accordance with the convening order, the chair adjourned the scheme meeting for four days to allow the creditors to consider the amendments.Documentary amendments: further amendments to the lock-up agreement (to change the “Initial Binding Tax Ruling Long-Stop Date), did not require amendments to the actual scheme itself (the lock-up agreement was not itself a ‘Scheme Transaction Document’) and were no impediment to the judge sanctioning the scheme.No blot: despite the ambiguity as to the mechanism

Produced with input from Rebecca Cousin of Slaughter and May on market practice. This Practice Note explains the nature of a scheme of arrangement in a takeover context, describing its statutory basis under the Companies Act 2006 (CA 2006), the various forms of scheme traditionally used and the key requirements for implementing a scheme in relation to a takeover. There are two primary methods of implementing a takeover of a UK public company: • by way of a contractual takeover offer under CA 2006, s 974 (offer) • by way of a scheme of arrangement under CA 2006, Pt 26 (scheme) The two structures possess some fundamentally different characteristics and there are advantages and disadvantages to each. See Practice Note: Structuring a takeover—offers vs schemes of arrangement which compares and contrasts the principal features, and advantages and disadvantages, of each structure. Further information on the nature and structure of a contractual takeover offer is set out in Practice Note: Voluntary and partial offers. Takeovers of a UK public company, whether implemented by

Produced with input from Rebecca Cousin of Slaughter and May on market practice. This Practice Note looks at the detailed procedures to be followed to implement the acquisition by a buyer (offeror) of all the shares, or one or more classes of shares, in a company (offeree) which it does not already own under a scheme of arrangement made under Part 26 of the Companies Act 2006 (CA 2006) (scheme). Unlike a takeover offer, a scheme involves no contract between the offeror and offeree shareholders. Instead, it is a statutory mechanism used to implement a range of corporate transactions. In a takeover context, a scheme is put forward by the offeree to its shareholders, or to the holders of the relevant class of shares. The involvement, and cooperation, of the offeree's board of directors is therefore usually required. A scheme is typified by certain essential characteristics, most significantly that it will require both offeree shareholder approval at a court-convened meeting and sanction by the court itself. For an explanation of the nature of schemes of arrangement, how

Schemes of arrangement—definition and basis in statute A scheme of arrangement is a court-sanctioned compromise between a company and its creditors or members. The subject of a scheme of arrangement may cover anything that the company and its members or creditors would not otherwise be able to agree between themselves; the scheme process allows such a compromise to be implemented without the support of 100% of the interested parties. The implementation of schemes of arrangement is governed by sections 895–901 of the Companies Act 2006 (CA 2006), although almost identical sections have existed for well over 100 years within the companies legislation in various forms. While CA 2006 does not prescribe the process specifically, it defines the process indirectly by prescribing the requirements for the court to sanction a proposed scheme (Re Rodenstock). It is mandatory to use electronic filing (e-filing) in all jurisdictions of the Rolls Building, which includes the Insolvency and Companies List, so issuings and filings must be made online using the CE-File website. For further reading, see

The voting requirement As set out in Practice Note: Schemes of arrangement—process and statutory framework, section 899(1) of the Companies Act 2006 (CA 2006) provides that a scheme of arrangement can be sanctioned by the court only if it is approved by (i) a majority in number (the numerosity test) (ii) representing 75% in value of the creditors voting in person or by proxy at each of the scheme meetings. From 26 June 2020, for any scheme that is proposed within 12 weeks of a moratorium under the Corporate Insolvency and Governance Act 2020 (CIGA 2020), the holders of any moratorium debts and pre-moratorium debts for which the company did not have a payment holiday during the moratorium have, in effect, a veto right in respect of the scheme as the court may not sanction the scheme if it includes provision in respect of such creditors without their consent (see Practice Note: Moratorium). For information on the methodology to be applied to determine the correct composition of the classes of creditors, see Practice

This Practice Note is about the meaning of a scheme of reconstruction for tax purposes. The definition of a scheme of reconstruction is important because in order for certain group restructuring transactions to be achieved in a tax neutral manner they must involve a scheme of reconstruction. For more information about the tax neutral treatment of schemes of reconstruction, see Practice Notes: Tax reliefs for schemes of reconstruction, Intangible fixed assets on the transfer of a business or trade — Company reconstructions and (in the context of demergers) Demergers—an introduction to the tax issues. Meaning of scheme of reconstruction What constitutes a scheme of reconstruction for tax purposes is defined by statute as any: • merger—including where two or more companies (and their businesses) are combined • division (ie a demerger or partition)—including where one company (and its business) is split into two or more companies, or • other restructuring—including, for example, where two or more companies combine (or redivide) their businesses in two or more different companies provided that it satisfies: • the first condition (issue

The abolition of border controls within the Schengen Area is one of the main achievements of the EU, and it characterises and forms an integral part of the European model of society and the European way of life. However, serious events (eg the Covid-19 pandemic, increase in illegal migration) have brought up the weaknesses and gaps in the Schengen borders management system. In order to tackle the migration issues that the Member States are facing and to secure borderless travel within the Schengen Area, important amendments have been introduced in 2024. This Practice Note focuses on Regulation (EU) 2016/399 on a Union Code on the rules governing the movement of persons across borders (codification), the Schengen Borders Code, which lays down rules governing the movement of persons to and from the area without internal border control, as well as between Member States that participate in the Schengen Area. It also encompasses the amendments made in 2024, highlighting the key items of the current Schengen Borders Code and describing

The Schengen area is the territory within Europe in which the free movement of people is ensured.

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