Plan and Simple? New UK Practice Statement tightens process and requirements for schemes and restructuring plans

The Revised Practice Statement¹ follows the public consultation launched in May 2025, and comes at a time of increased litigation surrounding the implementation of restructuring plans in particular. See by way of example our recent articles on the Court of Appeal decisions in Adler² and Petrofac³ and the recent High Court judgment refusing sanction of the restructuring plan proposed in Waldorf ⁴.

The revisions take account of nearly five years of the use of restructuring plans, and aim to improve the efficiency and fairness of the restructuring plan process, including better managing judicial resources. The key practical takeaways from the changes are that (i) more time will need to be built into the restructuring plan timetable than previous practice, and (ii) as a result debtors will need to engage with their advisors, creditors and other key stakeholders much earlier than has perhaps been the case in the past.

Key changes

The Revised Practice Statement imposes a number of additional obligations on the proponent of a creditors’ scheme of arrangement or restructuring plan (the applicant). In particular:

• Claim Forms and Hearing Dates:
  • The Court will no longer reserve hearing dates for an applicant until the applicant has filed its claim form seeking orders under Parts 26 or 26A of the Act. This will result in a departure from current practice, where dates are often held well before documents are filed (or indeed finalised), to allow companies and their stakeholders flexibility to launch a court supervised process if consensual restructuring negotiations fail.
  • In addition, applicants will now need to file a listing note setting out:
    • time estimates for convening and sanction hearings;
    • indicative overall timetable (including appeals);
    • any matters likely to have an impact on that timetable (including relevant financial context and potential contested issues); and
    • any factors giving rise to urgency (including when the applicant became aware of those factors).
  • The last of these suggests that the Court may provide less leeway to debtors that did not act sooner when faced with urgent but potentially foreseeable financial issues.
• Evidence Requirements:
  • The Revised Practice Statement provides that applicants should generally file their evidence in support of a proposed restructuring plan or scheme at least 14 days before the date of the convening hearing. This is another departure from current practice, in which evidence is sometimes only filed a matter of days before the convening hearing. The extent to which the Court enforces this timetable in urgent matters will be of keen interest to restructuring practitioners and investors.
  • Matter to be addressed in the evidence filed include whether any update to the information in the listing note is required; whether sanction might require the court to exercise its cross-class cram down powers and if so (i) to what extent the applicant has engaged with creditors and members (and if the level of engagement has differed between different groups, the reason for that differential treatment, (ii) whether any objection or alternative restructuring proposal has been received and (iii) what information has been given to creditors and members (and if different information has been provided to different groups, the reason for that).
• Explanatory Statement:
  • The Revised Practice Statement provides that a final form explanatory statement should be included in the evidence to be filed by an applicant. This will put pressure on the applicant to finalise negotiations much earlier in the process to allow sufficient time for the explanatory statement to be prepared. Where changes to the explanatory statement are nonetheless required following the convening order, any material amendments should be (i) communicated in good time to the relevant creditors so that they can assess the impact of the changes prior to the relevant meeting(s); and (ii) where possible, approved by the Court. If these steps are not followed, the Court may take this into account when deciding whether to sanction the scheme or plan.
  • The Revised Practice Statement also stresses that explanatory statements should be concise, user-friendly, and include a short summary at the beginning of the statement. This follows recent judicial guidance as to the content of explanatory statements (Re ALL Scheme Limited [2021] EWHC 1401 (Ch) (24 May 2021)).
• Objections and Case Management:
  • Anyone wishing to object to the proposed restructuring plan or scheme must identify the nature of their objections at least 7 days before the convening hearing and objections must be as precise as possible taking into account the information provided to the objector. The Revised Practice Statement notes that if objectors do not raise issues at convening, they can still do so at sanction, but must show good reason for the delay (though no guidance is given as to what will constitute a “good reason”).
  • In addition, the Revised Practice Statement provides the Court with increased case management powers, including empowering the Court to give directions to ensure an efficient process, including narrowing issues, setting timetables, managing evidence (including expert evidence), ordering disclosure or information sharing, and making provision for costs. The Court can also address issues not suitable for the convening hearing at later case management hearings.

Conclusion

The Revised Practice Statement represents a material shift towards earlier preparation and stricter case management in schemes and restructuring plans. It mandates a version of a pre-action protocol, with an emphasis on early identification and management of potential issues and proper engagement with stakeholders, which should help reduce delays and ensure all parties are properly informed. Companies contemplating a court-supervised process will need to allow more time to prepare their evidence and explanatory materials, engage with stakeholders at an earlier stage, and anticipate objections well in advance of the convening hearing. The changes increase procedural discipline and should, in practice, lead to more orderly and predictable restructurings.

Authored by The London Restructuring and Special Situations team.