Objection To Examiner's Proposals On Basis Of Creditor Classification Upheld

The High Court examinership of Mac Interiors Limited has given rise to a second important judgment (see our update dated 14 July 2023 in relation to the first such judgment here). In a judgment delivered on 9 October 2023, Mr Justice Quinn held that the court had no jurisdiction to confirm the examiner's proposals for a scheme of arrangement on the basis that there was a material irregularity in relation to the meetings at which the proposals were considered by the creditors (contrary to section 541 of the Companies Act 2014).

The irregularity in question was the creation of a class of creditors described as the "Retained Project Creditors" class (which was the requisite impaired and "in the money" class of creditors that voted in favour of the proposals), which the Court concluded was an improperly constituted class. Although it was proposed that the Retained Project Creditors would receive the same dividend under the proposals as the ordinary unsecured