High Court approves restructuring plan for Amicus Finance

The English High Court has approved a restructuring plan for Amicus Finance PLC, forcing a creditor to accept the terms of a restructuring plan and taking the company out of administration.

Mark Fry, Jamie Taylor and Kirstie Provan, partners at Begbies Traynor and joint administrators of Amicus Finance PLC after it entered administration in December 2018, proposed a restructuring plan at a sanction hearing on 11th August in order to prevent the firm having to file for liquidation.

Due to the joint impact of Covid-19 and Brexit having a detrimental impact on the realisations of Amicus Finance PLC, the administrators felt that the continuation of the administration was no longer a financially viable option. 

They sought to use Part 26A of the Companies Act 2006 — introduced in June last year by the Corporate Insolvency and Governance Act 2020 — to propose a restructuring plan to provide an exit route from administration, which would allow the company to continue as a going concern and place creditors in a better position than if the company was placed into liquidation.

Thanks to the new powers given to the courts last year by the Corporate Insolvency and Governance Act 2020, the High Court was able to approve the plan despite one of the creditors, Crowdstacker Corporate Services Limited (CCSL), being opposed. 

This means that companies no longer have to gain consensus from creditors.

Following the ruling, Mark, Jamie and Kirstie will continue as restructuring plan administrators of Amicus Finance plc.

Charlotte Møller, partner at Brown Rudnick, which advised Amicus Finance PLC’s second creditor, Hartford Growth (Trading) Limited (HGTL), said: “Our clients are of course pleased to hear that the Amicus restructuring plan has been sanctioned as they have been supportive of it throughout the proceedings.

“More generally, given that these plans remain a new and developing area of law, we hope that this decision will help to pave the way for the use of restructuring plans as a viable tool for the rescue of distressed mid-market companies and as an exit route from administration.”

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