Cloud 9fin Distressed Diaries — Hardly fair? The evolution of English restructuring plans
Aug 29, 2025
In this engaging discussion, Kate Stephenson and Kon Asimacopoulos, partners at Kirkland & Ellis, along with David Allison, barrister at South Square, dive into the evolving landscape of English restructuring plans. They examine the pivotal Court of Appeal decisions affecting fairness in distress cases, highlighting the complexities of stakeholder treatment. The trio shares insights on the need for clarity in legal guidance, the growing role of litigation in restructuring, and the significance of engaging junior creditors while balancing equitable distribution among all parties.
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Part 26A Shifted The Fairness Lens
- Part 26A introduced cross-class cramdown allowing judges to bind dissenting classes when the no worse off test is met.
- That change shifted fairness analysis from pure voting thresholds to judicial discretion over counterfactual outcomes.
Fairness Now Demands Allocation And Engagement
- Recent Court of Appeal decisions have reframed fairness to focus on allocation of benefits and stakeholder contributions.
- Courts now expect nuanced engagement and may criticise plans that ignore out-of-money classes.
Fifty RPs And Many Firsts
- Kon Asimacopoulos notes around 50 restructuring plans have been used in five years, with many being contested.
- He highlights a trend of firsts like cross-class cramdown, equity disenfranchisement and international groups using RPs.