High Court authorises first mid-market restructuring plan in landmark case

A restructuring plan for a mid-market company has been approved by the High Court for the first time in a case undertaken by the restructuring team at Begbies Traynor Group.
Firm News

| August 20th 2021

More News by Mark Fry

Date Published: 20th August 2021

High Court authorises first mid-market restructuring plan in landmark case

A restructuring plan for a mid-market company has been approved by the High Court for the first time in a case undertaken by the restructuring team at Begbies Traynor Group.

Mark Fry, Jamie Taylor and Kirstie Provan, Partners at Begbies Traynor, are the joint administrators of Amicus Finance plc, a short-term property finance company which has continued to trade since being placed into administration in December 2018. The administrators proposed a restructuring plan at a sanction hearing on 11 August in order to prevent the company having to file for liquidation.

A restructuring plan is a new restructuring tool introduced in June 2020 into Part 26A of the Companies Act 2006 by the Corporate Insolvency and Governance Act 2020, and is similar in nature to the more established Scheme of Arrangement process, whereby stakeholders are divided into categories for both voting purposes and also in regard to their treatment under the proposal. However, where the restructuring plan differs is in the allowance for dissenting classes of stakeholders to be bound: this is known as “cross-class cramdown”.

Despite a dissenting creditor, Crowdstacker Corporate Services Limited (CCSL), attempting to block the proposed Amicus Finance restructuring plan, the High Court agreed to cramdown the creditor, ruling in favour of the administrators. This is only the second fully opposed cross-cramdown decision, and the first involving the cramdown of a secured creditor, making this a landmark case and one which is hugely significant in the UK restructuring world.

Due to the joint impact of Covid-19 and Brexit having a detrimental impact on the realisations of Amicus Finance, the administrators felt that the continuation of the administration was no longer a financially viable option. The joint administrators, therefore, sought to use Part 26A of the Companies Act 2006 to propose a restructuring plan to provide an exit route from administration which would allow the company to continue as a going concern and place creditors in a better position than if the company was placed into liquidation.

The restructuring plan negotiated the claims of five separate classes of creditors: expense, senior secured, junior secured, preferential and unsecured. The company’s secured creditors were of Hartford Growth (Trading) Limited (HGTL), and Crowdstacker Corporate Services Limited. While HGTL were supportive of the restructuring plan, Crowdstacker had fully opposed the proposal, and argued that they should be placed in a separate creditor class to HGTL. The court, however, was satisfied that secured creditors would be no worse off if the restructuring plan was implemented than in the event of the ultimate liquidation of Amicus Finance.

The restructuring plan of Amicus Finance represents the first plan of its kind to be proposed by an administrator and pulls into sharp focus the reality that, although a company has been placed into administration, it can still be rescued as a going concern even when opposed by secured creditors. Following the ruling, Mark Fry, Jamie Taylor and Kirstie Provan will continue as restructuring plan administrators of Amicus Finance plc.


About the author

Mark Fry

Partner

Meet our Team of Experts

Mark is an experienced insolvency practitioner, with over twenty years experience. Originally a founding partner in Taylor Gotham & Fry, a specialist boutique practice in the corporate recovery sector, he later sold this practice in 2005 to Begbies Traynor. Mark is now the Regional Managing Partner for the company, responsible for London and the South East. During his time at Begbies Traynor he has developed a separate but integrated restructuring and banking practice; this part of the business has worked in both debtor and creditor led turnaround situations. He also holds several directorships of trading companies outside the financial sector, which assists his awareness and understanding of the issues found by business managers and owners. 

Mark is a Counsel Member of the Insolvency Practioners Association and a member of their Membership and Authorisation Committee, as well as the Education and Training Committee.  He has also served as a member of the General Technical Committee for R3, the Association of Business Recovery Professionals.

108 Regional UK Offices

Find your local Begbies Traynor office and speak to an adviser today.

Find your Local Office
0800 063 9221

Call our Confidential Advice Line. Calls to this number are free of charge.

Call us now...
Request a Meeting

We invite you to come and discuss your enquiry with us at your convenience.

Request a meeting...
0800 464 0871

Call our Confidential Advice Line. Calls to this number are free of charge.

Call us now...
Request a Meeting

We invite you to come and discuss your enquiry with us at your convenience.

Request a meeting...
0161 837 1700

Call our Confidential Advice Line. Calls to this number are free of charge.

Call us now...
Request a Meeting

We invite you to come and discuss your enquiry with us at your convenience.

Request a meeting...
Begbies Traynor Group plc, announces that it has completed the acquisition of CVR Global LLP
CVR is a leading independent firm of insolvency practitioners, forensic accountants and experts in other related complementary disciplines.
Read More →
 
Coronavirus pushes financially distressed companies over the half-million mark
Number of businesses in significant distress stands at 509,000 – the highest number measured by the Red Flag Alert research
Read More →
 
BTG Advisory accelerates growth with appointment of four new partners to its London office
BTG Advisory, the boutique advisory arm of Begbies Traynor Group announces the appointment of four new partners to its Canary Wharf office
Read More →
 
Eighty jobs saved with £1m sale of engineering business
South Yorkshire company Newburgh Precision rescued through administration
Sale enables 75-year-old business to continue trading
Read More →
 
Join thousands of professionals by signing up for our updates
Analysis and Opinion from our Partners
Top Industry News
Register Now →
 

Advice you can trust

We are accredited by the following industry leading organisations

Insolvency Practitioners Association Institute of Chartered Accountants in England and Wales R3: Association of Business Recovery Professionals ICAEW Business Advice Service Turnaround Management Association ICAS | The Institute of Chartered Accountants of Scotland

Contact the Begbies Traynor team

or Find your Nearest Office

Here at Begbies Traynor Group we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Processing...

This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our PRIVACY POLICY