First restructuring plan decision since “Petrofac”

The High Court has sanctioned Argo Blockchain plc’s restructuring plan under Part 26A Companies Act 2006, despite a defective noteholder meeting, by using the cross class cram down power.

Invalid noteholder meeting – when proxy isn’t enough

The noteholder class overwhelmingly supported the plan by proxy. However, no noteholder (beneficial or nominee) attended the meeting. Only the chair attended, acting as proxy.

The court held that:

•  A class meeting under Part 26A requires two or more persons “coming together”
•  A single individual holding multiple proxies doesn't constitute a meeting
• Accordingly, the noteholders hadn't approved the plan at a valid meeting

This meant the noteholders had to be treated as a dissenting class, even though economically they supported the plan. The judge described treating them as dissenting as “counter intuitive” but legally unavoidable.

This decision shows that even supportive creditors can become a dissenting class through a technical defect with voting. Companies can't rely solely on proxy voting for class meeting validity; someone other than the chair of the meeting must attend.

Court applies cross class cram down (s.901G)

Because the noteholder vote was invalid, the court analysed the plan under s.901G. The statutory tests were clearly satisfied:

Condition A – “No worse off”
The court was satisfied with evidence presented which showed that in the relevant alternative (administration and group wind down):

• Noteholders would recover 0.72%
• Shareholders 0%

Under the plan, both received meaningful equity. Neither class was worse off.

Condition B – assenting in the money class

Growler, the secured lender and a class with a genuine economic interest in the relevant alternative, approved the plan by well over 75% in value.

Having met both conditions, the court exercised its discretion to impose the plan on the noteholders.

Judge’s warning on compressed timetables

At the end of the judgment, Hildyard J issued a clear warning to companies and advisers about imposing excessively tight timetables on the court in restructuring plan cases. He emphasised that the court’s willingness to work at speed for companies in genuine financial distress “must not be taken for granted or abused”. Applicants must plan realistically, ensuring the court has adequate time to consider materials, rather than relying on last minute submissions which place an intolerable burden on the judiciary.

Re Argo Blockchain plc [2025] EWHC 3395 (Ch)

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