CR-2025-004622 - [2025] EWHC 2276 (Ch)

Fecha: 08-Ago-2025

Issues in relation to the assenting classes

Issues in relation to the assenting classes

35.

It is well settled that where a class of creditors approves a scheme then Court accepts that those creditors are likely to be the best judges of their own commercial interests, but that the Court is not bound by their view and there remains a discretion to be exercised. Generally, the court will ask, as a cross-check on the possible influence of collateral interests, whether the plan is one of which an intelligent and honest class member might, having regard to their class interests, reasonably approve (“the rationality test”). In the instant case I unhesitatingly answer that in the affirmative.

36.

First, I am satisfied that the restructuring plan is an alternative to a group-wide insolvency. The failure of the Group business means the immediate cessation of customer relationships and loss of future business. In the case of the landlords, the sale of the trading assets in administration will mean that they will be left with empty units in respect of which no rent or property costs are being paid; and will be faced with the choice of either forfeiting leases (facing the prospect of a void period, enhanced business rate charges, and security issues) or awaiting the conversion of the administration into a liquidation and the disclaimer of the leases. Having a tenant in place under the plan, albeit at a reduced rent, presents an attractive alternative. It avoids the immediate burden of an involuntarily vacant property but preserves the option to recover possession if the market provides better opportunities than the amended lease terms under the restructuring plan.

37.

Second, the restructuring plan provides a greater return than that which is achievable in an administration. The Plan Creditor Fund provides an assured uplift and the Profit Share Fund provides the prospect of a greater return dependent upon the performance of the business. The objective of the transformation plan is to the reverse the historic decline in like-for-like sales and to achieve a forecast 1% per annum growth. But the actual growth might be higher over the contemplated five-year period. The greater return is shown in the following table:-

Category of stakeholder	Estimated Return in Relevant Alternative (low/high case)	Estimated Return under RP after 5 years assuming 1% growth	Estimated Return under RP after 5 years assuming 4% growth
Secured Lender	15.6-38.1p/£	28.8-46.8p/£	87.1-100p/£
Class A Landlord	• Nil-0.4p • 3 wks rent and property costs	• 100p/£ rent and property costs • 0.8p/£ from Plan Creditor Fund	• 100p/£ rent and property costs • 0.8p/£ from Plan Creditor Fund • Pro rata share in £5.4 million Profit Share Fund
Class B1 Landlord	• Nil-0.4p • 3 wks rent and property costs	• 75p/£ rent during RCP and full contractual rent thereafter • 100p/£ property costs • 0.8p/£ from Plan Creditor Fund • 3 wks contractual rent and property costs	• 75p/£ rent during RCP and full contractual rent thereafter • 100p/£ property costs • 0.8p/£ from Plan Creditor Fund • 3 wks contractual rent and property costs • Pro rata share in £5.4 million Profit Share Fund
Class B2 Landlord	• Nil-0.4p • 3 wks rent and property costs	• 60p/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord]	• 60/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord]
Class B3 Landlord	• Nil-0.4p • 3 wks rent and property costs	• 50p/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord]	• 50p/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord]
Class B4 Landlord	• Nil-0.4p • 3 wks rent and property costs	• 25p/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord]	• 25p/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord]
Class C Landlords	• Nil-0.4p • 3 wks rent and property costs	• 0p/£ rent until termination • [As for Class B1 Landlord]	• 0p/£ rent until termination • [As for Class B1 Landlord]
Business Rate Creditors	• 3 wks business rate payments • Nil-0.4p/£	• 3 weeks business rate payments • 0.8p/£ from Plan Creditor Fund	• 3 weeks business rate payments • 0.8p/£ from Plan Creditor Fund • Pro rata share in £5.4 million Profit Share Fund
General Creditors	• Nil-0.4p/£	• 0.8p/£ from Plan Creditor Fund	• 0.8p/£ from Plan Creditor Fund • Pro rata share in £5.4 million Profit Share Fund
Shareholder	• Nil	Implied equity value of minus £332m to minus £248m	Implied equity value of minus £63m to plus £113m

38.

I therefore see no reason to differ from the opinion of the assenting classes.