There has been a recent vogue for overseas groups to seek a Scheme of Arrangement under English law by a court order in the High Court in London. To do this, the applicant company has to overcome some complex jurisdictional hurdles as well as establishing to the court’s satisfaction that the scheme is for the overall benefit of the creditors. The advantage of a scheme of arrangement under the Companies Act is that it is a way of binding dissentient minorities in a way that some overseas jurisdictions do not permit. In order to be approved by the court at least 75% of creditors in each class of creditor must vote in favour of the scheme.
In the article below, which appeared in the September 2014 issue of “The In House Lawyer“, Richard Baines, Partner and Head of Corporate Restructuring and Insolvency at Druces LLP reviews the recent case law which gives guidance to foreign companies wishing to use the scheme of arrangement procedure as a means of restructuring.