Stay Of Proceedings In Consequence Of Restructuring Plan

• Published date: 09 July 2021
• Subject Matter: Real Estate and Construction, Insolvency/Bankruptcy/Re-structuring, Financial Restructuring, Landlord & Tenant - Leases
• Law Firm: Mills & Reeve
• Author: Morgan Bowen

A restructuring plan to compromise certain landlord claims was allowed to proceed without being impeded by judgment being entered on a landlord's claim for arrears.

The claimant applied for summary judgment on its claim for rent arrears brought against the defendant. The defendant applied for a stay of the claim, alternatively, a stay of enforcement of any judgment on the claim. The defendant was pursuing a restructuring plan under Part 26A of the Companies Act 2006. Under the plan, the landlord was one of a class of landlords whose arrears were to be written off in exchange for receiving 120% of the sum the landlord would receive in a hypothetical administration. The defendant argued that granting judgment on the landlord's claim would result in unequal treatment of creditors.

The court held that a stay should be ordered. The court reasoned that whether or not to grant a stay was highly fact specific. Of particular relevance to the court's conclusion was...