CR-2025-001156 - [2025] EWHC 2129 (Ch)

Starting with Adler, Snowden LJ analysed the extent to which the principles applicable to Part 26 schemes of arrangement applied in a Part 26A restructuring plan context.

As for class composition, Snowden LJ confirmed (at [109]-[114]) the cross-application of the basic principles applicable to Part 26 schemes, namely that a class “must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest” (Sovereign Life Assurance v Dodd [1892] 2 QB 573 (at [583]), a test requiring an exercise of judgment on the facts of each case (In re Telewest Communications plc (No 1 [2005] 1 BCLC 752)). A broad approach is taken, with the differences in rights being material - certainly more than de minimis - without leading to separate classes.

According to re Hawk Insurance Co Ltd [2001] 2 BCLC 480 (at [30] and [34]), the dissimilarity of rights test is to be applied based upon an analysis of (i) the rights to be released or varied under the scheme and (ii) of the new rights (if any) which the scheme gives by way of compromise or arrangement to those whose rights are to be released or varied. Where a scheme of arrangement is proposed as an alternative to a formal insolvency process, the application of the first limb of the “similarity of rights” test requires the court to identify the rights that the creditors would have in that insolvency process, rather than those that they would have if the company were to carry on business in the ordinary course (Hawk at [42]).

Based on MOL’s submission that BMK was putting in new money and being locked into the Group’s capital structure and the bulk of its debt in the Group written off (or subordinated to Outrider’s interests in the structure) to support the Group, with Outrider, by contrast, being offered a better exit from the Group’s capital structure than it would get if MOL entered a Mauritian liquidation, Mellor J found in his Convening Judgment that it would be impossible for Outrider and BMK to consult together in a single class. Moreover, the negotiations which had occurred to that point indicated that Outrider and BMK were unable to find common ground. Finally, he concluded that, were he to order a single meeting, it would kill the Plan, it seeming inevitable that the requisite majorities would not be achieved such that the Plan could never reach the sanction stage. As such, it was appropriate for separate meetings of creditors.