Restructuring plan

Law - UK - insolvency.

(RP).

The restructuring plan is a UK insolvency procedure introduced by the UK's Corporate Insolvency and Governance Act 2020.

The restructuring plan is designed to be a more flexible means of implementing a restructuring for companies facing financial distress.

Treasurers vital to secure creditor support

"A restructuring plan (RP)... is increasingly being used to turnaround ailing companies.

... the RP will [need to] be able withstand intense scrutiny and challenge by both the creditors and the judge.

Treasurers will therefore need to make sure the information they provide... is robust and thorough to support the process."

The Treasurer magazine, Issue 4 December 2023, p19 - Permjit Singh FCT PhD.

Potentially very useful reform

"The procedure is closely based on the scheme of arrangement, but with some important distinctions.

Most notable is the inclusion of a cross-class, cram-down mechanism.

This will allow the court to sanction a plan even if the support of a class has not been obtained, as long as certain conditions are met.

The restructuring plan has the potential to be a very useful addition to the toolkit, and the first such plan has already been proposed, although there are a number of complex issues that will need to be worked through and tested in practice."

The Treasurer magazine, October 2020, p40 - Slaughter and May.

See also

• Balance sheet insolvent
• Cash flow insolvent
• Chapter 11
• Company voluntary arrangement
• Corporate Insolvency and Governance Act
• Cost of financial distress
• Creditors
• Individual Voluntary Arrangement
• Insolvency
• Insolvency practitioner
• Insolvency Service
• London Approach
• Moratorium
• Relevant alternative (RA)
• Restructuring
• Sanction
• Scheme of arrangement
• Solvency
• Statement of affairs
• Statutory demand
• Turnaround
• Voluntary liquidation
• Winding up petition
• Workout
• Wrongful trading