The English High Court has highlighted the importance of parties treating restructuring plan proceedings as commercial litigation and complying with the requirements of the Civil Procedure Rules (CPR).
Background
Chaptre Finance Plc (the Company) sought the sanction of a restructuring plan which was opposed by a class of senior creditors.
At the convening hearing, the Company produced expert reports to the court to show that the creditors would be no worse off under the restructuring plan than in the relevant alternative of administration. The judge found that the reports failed to comply with the CPR as they did not identify the authors or their expertise and disclaimed any duty to the court.
The judge stated that in the absence of CPR compliant expert reports the Company would struggle to satisfy the "no worse off" condition necessary for the plan to be sanctioned.
Decision
At the sanction hearing, the opposing creditors criticised the reports but did not cross-examine the experts or provide their own evidence. The judge stated that he could not be expected to engage in a rigorous challenge of the evidence without cross-examination of the experts. As a result, he accepted the Company's revised evidence and sanctioned the plan.
Key takeaways
- Proper case management of proceedings for restructuring plans (like other litigation proceedings) requires the parties to identify points of dispute as early as possible.
- Parties are also required to serve properly prepared evidence complying with the rules.
- Those challenging expert evidence should cross-examine witnesses to allow proper judicial assessment.
Find out more
To discuss the issues raised in this article in more detail, please contact a member of our Restructuring & Insolvency team.
Re Chaptre Finance PLC [2024] EWHC 2908 (Ch)