5 April 2023
RI Updates - April 2023 – 1 of 4 Insights
The High Court has clarified the grounds for challenging a CVA for guarantee creditors.
Mizen Design/Build Ltd's (Mizen) directors proposed a CVA stating that this would lead to a better result for unsecured creditors than the likely alternative, administration.
The CVA compromised guarantee creditors' ability both to bring a claim against Mizen and to call upon their performance guarantees against Mizen's parent company (the Parent Guarantor).
Peabody Construction Ltd (Peabody), a guarantee creditor, successfully challenged the CVA on the grounds of material irregularity and unfair prejudice.
The Court held that:
To discuss the issues raised in this article in more detail, please contact a member of our Restructuring & Insolvency team.
Re Mizen Design/Build Ltd [2023] EWHC 127 (Ch)
5 April 2023
5 April 2023
5 April 2023
by Louise Jennings and Isabelle Moisy
by Louise Jennings and Isabelle Moisy
by Louise Jennings and Isabelle Moisy