The Adler Restructuring Saga: Fair Wind for Dissenting Creditors?

Besides temporary changes to address the challenges arising from the COVID-19 pandemic, CIGA 2020 introduced a general prohibition on the validity of contractual termination clauses, as well as a new Pt 26A restructuring plan procedure and a Pt A1 statutory moratorium.
The government is considering further reforms, including the enactment of the UNCITRAL Model Laws on Enterprise Groups and on Insolvency-related Judgments. The findings in the final report on the implementation of CIGA 2020 support the view that the English corporate restructuring framework provides companies in financial distress with a highly effective toolkit to turn around their businesses.
In this context, it is not surprising to learn that, in 2022, the Luxembourg-incorporated and German-centred Adler group decided to rely on the English corporate restructuring framework to reach a compromise with its creditors. This case note focuses on the English restructuring proceeding. Its purpose is to clarify the relevance of this procedure and to provide some guidance on one of the most controversial and unique features of restructuring plans, i.e. the use of cross-class cram-downs against dissenting class(es) of creditors.