On 12 May 2021, Mr Justice Snowden sanctioned Virgin Active’s three inter-conditional restructuring plans under Part 26A of the Companies Act 2006. The case has been followed with significant interest in the restructuring community because the restructuring plans included the most extensive cross-class cram down proposal since the introduction of the restructuring plan process last year (DeepOcean and Smile Telecoms are the only other restructuring plans to utilise the cram-down mechanism). The plans were also the first to seek to compromise lease liabilities and the first to be fully contested. The judgment provides guidance on how the Court will assess the relevant alternative for the “no worse off” test and explains the factors the Court will consider when exercising its discretion to sanction plans where creditor classes have dissented. The Hogan Lovells London Restructuring team, with support from our Sydney, Singapore, Amsterdam, and Milan offices, advised the senior secured lenders on this landmark deal.
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