English Schemes Of Arrangement: Some Practical Advice For Proponents

Van Gansewinkel Groep BV, Re [2015] EWHC 2151 (Ch)

In what appears to be a growing trend, the High Court in England has sanctioned another scheme of arrangement involving non-English companies. Last week's judgment from Mr Justice Snowden joins an ever growing number of decisions by the English courts to sanction schemes where debtors do not have their centre of main interests, establishment or any significant assets in England. In this instance, the scheme was sanctioned on the basis that the English governing law clauses contained in the companies' financing agreements, constituted a "sufficient connection" with England. In addition to providing further evidence of the English courts readiness to sanction such schemes of arrangement, it provides some helpful advice for proponents of schemes.

What is a Scheme of Arrangement?

A scheme of arrangement is a tool which allows a company to restructure some or all of its debts outside a formal insolvency process by presenting a proposal and receiving agreement from the requisite majority of its creditors. Pan European companies have increasingly sought to restructure their debts by way of an English scheme as it offers a flexible and expeditious route that may not necessarily be available to...