UK Law and Practice Contributed by: Fergus Wheeler, Paul Yin, Tracy Liu and Medha Vikram, Latham & Watkins
the restructuring plan were not sanctioned. By virtue of these mechanisms, the restructuring plan process provides for the possibility of a “cross-class cram- down”, meaning the courts may sanction a restructur - ing plan even if one or more classes of affected credi - tors do not vote in favour of the restructuring plan, effectively allowing the vote of one class of stakehold - ers to bind other classes. Following approval of the restructuring plan at the creditor meeting(s), the restructuring plan needs to be sanctioned by the court at a sanction hearing where the court will review whether the applicable statu - tory conditions have been met and will also consider whether the restructuring plan proposes a fair allo - cation between creditor classes of the benefits pre - served or generated by the restructuring. The court has discretion as to whether to sanction the restruc - turing plan as approved, make an order conditional upon modifications being made or refuse to sanction the restructuring plan.
Once sanctioned, the restructuring plan binds all affected stakeholders whose rights will be as set out in the restructuring plan, which will be effective (in line with its terms) upon delivery of the court’s order sanc - tioning the restructuring plan to the Registrar of Com - panies or, where the company is an overseas compa - ny, publication of the court’s order in the Gazette. As with a scheme of arrangement, the commencement of a restructuring plan process does not automatically trigger a moratorium of claims or proceedings. 7.10 Expedited Restructurings See 7.1 Impact of Insolvency Processes for a description of pre-pack sales.
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