We have seen an increasing number of contested restructuring plans (RPs) over the last quarter. With a notable shift of RPs into the litigation arena, and some gentle push back from the judiciary about timetabling and use of court time the judiciary has published a draft practice statement for consultation outlining new case management requirements for those proposing a plan.
Replies to the consultation must be submitted by 13 June, and although there is no official date for publication of the finalised statement, this is expected to be sometime in July.
The practice statement requires the parties to identify areas of contention and opposition early, seemingly seeking to streamline and reduce the number of issues that the court is required to deal with at sanction. In doing that there is a significant shift in process – requiring the plan company to issue a claim form before the court hearing is arranged and requiring the explanatory statement and all appendices to be prepared before the convening hearing.
The statement follows the direction of travel we have seen in recent cases, where the court has introduced case management processes – Madagascar Oil is a recent example where the court ordered a case management conference.
The statement is relevant not only to those proposing a plan, but also those who wish to object – requiring issues to be resolved in an efficient and orderly manner. Last minute opposition is unlikely to find much favour with the court moving forward.
Ultimately what the statement hopes to achieve is a more orderly approach to proceedings, but front loading much of the work comes with its own challenges – timing and costs being two.
Although this statement is not the final version, it is unlikely to change significantly between now and final publication, and in line with the approach we have seen the courts take recently it would be remiss not to apply the principles outlined in the statement now.