Waldorf Production UK Plc: leapfrog?

First instance judge grants appellant rare leapfrog certificate enabling it to leapfrog the Court of Appeal.

This case concerned a restructuring plan entailing the compromise of unsecured creditors at 5 pence in the £ with a contingent further payment subject to conditions as compared with the relevant alternative under which these creditors were out of the money. 

Applying the recent decisions of the Court of Appeal in Adler, Thames Water and Petrofac, the first instance judge considered that there had been a departure from the earlier Virgin Active approach in which de minimis payments to “out of the money” creditors were considered fair; in the circumstances the proposed distribution was unfair and accordingly sanction of the plan was refused.

The plan company applied to the same first instance judge for a “leapfrog” certificate granting it the right to seek permission to appeal direct to the Supreme Court, effectively leapfrogging the Court of Appeal in the process.

The judge held as follows:

1. The case concerned a point of law of general public importance. Here the judge reasoned that the issue, which was one of law, was whether fairness to out of the money creditors was to be assessed simply by reference to what those creditors would be likely to receive in the relevant alternative if a plan failed (as suggested by Virgin Active) or by reference to what those creditors, properly informed, would fairly and reasonably expect to be paid to give up their claims so as to enable the expected benefits of the restructuring if the plan were sanctioned (as per the Court of Appeal trilogy).
2. As regards the additional conditions required to be satisfied for the granting of a leapfrog certificate the plan company had sought to rely on section 12(3)(b) of the Administration of Justice Act 1969, ie the point of law was one on which the judge was bound by a decision of the Court of Appeal or Supreme Court.
3. Here the judge held that that, in his view, it was not necessary for him to be persuaded that the identified point of law was conclusive of the case (though that might be relevant in determining whether to grant the certificate): the test was not whether he was bound by the trilogy of cases to reach the result he did, but whether his decision centrally involved the application of a point of law on which he was bound [by the Court of Appeal]. The judge held that the instant case clearly did involve such a point of law.
4. There was also a realistically arguable prospect of the Supreme Court’s taking the view that the point of law should be qualified or overturned.

The first instance judge exercised their discretion in the circumstances to grant the leapfrog certificate. 

Importantly it should be noted that this only grants the applicants a right to apply for permission from the Supreme Court, who will also need to grant its permission before the appeal can be heard. 

In re Waldorf Production UK Plc [2025] EWHC 2297 (Ch).