In June 2020 the Corporate Insolvency and Governance Act introduced a new restructuring procedure known as the Restructuring Plan. This provides companies in financial distress with a more powerful restructuring tool than has previously existed in the UK insolvency regime.
A Restructuring Plan is an arrangement or compromise between the company and its creditors and/or shareholders which is sanctioned by the Court, to facilitate the rescue of the company.
The company’s creditors and/or shareholders must approve the Restructuring Plan, and they will vote in classes. Each class will be deemed to approve the Restructuring Plan if 75% by value of that class vote in favour.
A key aspect of the restructuring plan is that classes of creditors can be compromised, as long as they receive more than they would if the plan were not approved and at least one class of creditor (maintaining an economic interest if the plan is not approved) approves the plan. This can remove potential blockers to implementing restructuring arrangements.
At Cork Gully our team of experienced Insolvency Practitioners will work with companies who have encountered, or are likely to encounter, financial difficulties that will affect their ability to continue as a going concern. We will work with the company to ensure a viable Restructuring Plan is formulated and subsequently implemented, which will address the financial difficulties facing the company and allow it to prosper.