A consultation has been issued in relation to a replacement for the current Practice Statement for English schemes of arrangement and restructuring plans under Part 26 and Part 26A of the Companies Act 2006.

The draft new Practice Statement, intended to be issued by the end of July 2025, can be found here.

Although the draft Practice Statement applies to both schemes of arrangement and restructuring plans, the primary aim is to revise the current Practice Statement to improve the efficiency and fairness of the process under Part 26A. 

The consultation comes in the wake of a line of contested restructuring plan cases such as Adler, McDermott International, Thames Water and Petrofac which have seen the Courts and parties dealing with complex issues and voluminous documentation under great time pressure. 

As well as aiming to improve the efficiency and fairness of the restructuring plan process for all parties, the draft Practice Statement will establish ground rules to minimise commercial negotiations playing out in the court room as seen in cases such as McDermott International and Ambatovy.  The ambition of the draft Practice Statement requirements, including for a preliminary listing note and a detailed explanation of prior engagement amongst stakeholders, is to make the Part 26A process more time and cost efficient. 

We set out the key new points from the draft Practice Statement below.

New objective of active case management

• In addition to the objectives of the current Practice Statement, the draft introduces an additional objective to facilitate the early identification and active case management of contested issues, with a view to such issues being resolved in an efficient and orderly manner which involves a proportionate allocation of the Court’s time and resources.  It will be the responsibility of the applicants and all parties intending to support or oppose the scheme or plan to facilitate the achievement of that objective at the convening hearing so far as they can reasonably do so.
• While the Court will attempt to deal with proceedings under Part 26 and Part 26A in a timely and efficient manner, applicants, other proponents and opponents of a scheme or plan will be required to seek to manage their affairs and cooperate so as to avoid foreseeable timetabling pressures and facilitate the orderly resolution of such proceedings. 

New requirement of a “listing note”

• The company will be required to provide additional information to the Court – in the form of a “listing note” – when issuing a claim form for the scheme or plan.  The listing note must include:
  • time estimates for any hearings and an indicative timetable for the proceedings and any application for permission to appeal;
  • matters relevant to the company’s financial position;
  • any anticipated contested issues in the proceedings; and
  • any factors giving rise to urgency and identify when such factors first came to light.

Responsibilities of the applicant for the convening hearing

• Applicants will be required to identify convening issues in advance of the hearing, and provide notice of the convening hearing and relevant information in sufficient time to enable those affected by the scheme or plan to consider what is proposed, take appropriate advice and attend the convening hearing.

Evidence for the convening hearing

• Applicants will be required to identify a number of matters in their evidence for the convening hearing, including, amongst other things, if it is envisaged that the Court may be asked to exercise its cross-class cram-down power:
  • the level of engagement of those promoting the plan with creditors and members, and any discrepancy in levels of engagement with particular creditors or members;
  • the nature of any objection or alternative proposal put forward by the company’s creditors or members and the nature of any remaining disagreement; and
  • the information provided so far to creditors or members and the reason for any discrepancy in the level of information provided to them.
• The applicant’s evidence should also include a final form of the explanatory statement (including any annexures). If changes are anticipated to those documents, an explanation will be required as to why an order is necessary before the documents are ready for dissemination to creditors or members.  Any material changes required to those documents after granting of the convening order will require a further Court order.

• The nature of any parties’ objections to the scheme or plan which are likely to have an impact on matters considered at the convening hearing (including directions for the future conduct of the matter) must be identified by the objecting party as soon as practicable, with as much precision as possible in light of the information provided. They should also propose any directions they consider desirable.

Matters for consideration at the convening hearing

• The Court will:
  • give directions for the case management of issues (in particular contested issues) that cannot be dealt with at the convening hearing;
  • consider the form of the explanatory statement at the convening hearing and may refuse to make a meetings order if it considers that the explanatory statement is not in an appropriate form or is otherwise manifestly deficient (although the substance won’t be considered for approval at the convening hearing);
  • consider cross-border jurisdiction and recognition issues in relation to the proposed scheme or plan.

Further case management

• The Court may provide at the convening hearing or at subsequence case management hearings, any necessary further directions including regarding: defining and limiting issues to be resolved either prior to or at the sanction hearing; order and timetabling of issues to be resolved; service of evidence; service of expert evidence and the use of a single joint expert and for meetings of experts; making further information available to those affected by the scheme or plan, including disclosure orders, use of data room and confidentiality terms; and provision for costs.

The closing date for receipt of consultation submissions is Friday 13 June 2025. If you have any questions or would like to discuss the draft Practice Statement please get in touch with the Weil team.