Summary of updated Practice Statement in respect of Schemes of Arrangement and Restructuring Plans under the Companies Act 2006.
The Chancellor of the High Court, the Rt. Hon. Sir Julian Flaux, has published an updated Practice Statement in respect of Schemes of Arrangement and Restructuring Plans under the Companies Act 2006[1]. The overall aim is to front-load information, enhance case management, and balance urgency with fairness in proceedings.
A number of recent cases have shaped its provisions including:
Re Thames Water Utilities Holdings Ltd [2025] EWCA Civ 475: This Court of Appeal decision emphasized the need for companies to engage transparently with all affected creditors, including those potentially out-of-the-money, both before and during the restructuring process. It influenced the Practice Statement's requirements for detailed disclosures on stakeholder engagement, objections received, and differential treatment of creditors in plans likely to invoke cram-down.
Re Petrofac Ltd [2025] EWCA Civ 821: Another Court of Appeal ruling that reinforced the importance of full creditor engagement and information sharing. It contributed to the Practice Statement's expanded evidence requirements at the convening hearing, such as outlining any alternative proposals from creditors and reasons for variations in provided information.
Strategic Value Capital Solutions Master Fund LP & Ors v AGPS BondCo PLC (Adler) [2024] EWCA Civ 24: This case highlighted challenges in implementing restructuring plans amid litigation, shaping the Practice Statement's focus on early issue identification, case management directions, and stricter timelines for objections to ensure orderly resolutions.
Re Virgin Active Holdings Ltd [2021] EWHC 1246 (Ch): Earlier High Court guidance on cram-down was partially shifted by later appellate decisions (like Thames Water and Petrofac), leading to the Practice Statement's updated approach to creditor involvement and procedural safeguards.
Re Waldorf Production UK Plc [2025] EWHC 2181 (Ch): A High Court refusal to sanction a plan due to implementation issues, which underscored the need for the Practice Statement's reforms on evidence filing, explanatory statements, and handling material amendments post-convening.
These cases, along with others like Re ALL Scheme Limited [2021] EWHC 1401 (Ch) (on explanatory statement clarity) and examples from ED&F Man, Aggregate, and Madagascar Oil, reflect the evolving jurisprudence that drove a consultation in May 2025 and subsequent revisions.
The Practice Statement aims to: (1) enable early identification and resolution of issues concerning court jurisdiction, creditor/member class composition, and meeting convening; and (2) facilitate efficient management of contested issues with proportionate allocation of court resources.
When a scheme or plan includes proposals to creditors, applicants must issue a claim form in the scheme/plan company's name and file a listing note before arranging court hearings.
The listing note should include time estimates, timetables, details of potential contested issues, and urgency factors.
The document specifies which applications should be heard by High Court Judges versus Insolvency and Companies Court Judges, with creditors' schemes and Part 26A matters reserved for High Court Judges.
Applicants must identify issues regarding meeting constitution, court jurisdiction, and other matters that might affect the scheme/plan's sanction.
They must also notify affected persons about the scheme/plan, its purpose, required meetings, hearing dates, and how to obtain further information.
Evidence should be filed at least 14 days before the convening hearing, identifying notification steps, relevant issues, and proposals for creditor/member engagement.
The explanatory statement should be concise, explaining the commercial impact and providing sufficient information for informed decisions.
At the convening hearing, the court will address matters that can be properly dealt with and give directions for managing other issues.
The court will consider whether multiple meetings are needed and may include provisions for applications to vary orders.
The court may give directions on resolving issues, including timetables, evidence requirements, expert evidence, information disclosure, and cost provisions. Objectors at the sanction hearing who did not raise issues at the convening hearing will need to show good reason for the delay
The updated Practice Statement applies to applications for meetings orders at convening hearings listed on or after 1 January 2026.
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[1] Practice Statement from the Chancellor of the High Court: Part 26 of the Companies Act 2006 - Courts and Tribunals Judiciary