Part 26A Scheme Rejected

At the convening hearing the company had sought one meeting of the bondholders. The court however ordered a separate meeting of the shareholders to vote on the scheme on the grounds that they were affected by the scheme and the company had not sought at that hearing to argue that the shareholders had no genuine economic interest in the company. The bondholders subsequently voted in favour of the scheme and the shareholders voted against.

At the sanction hearing the court had to decide whether the vote of the shareholders could be “crammed down” under the Part 26A power so to do where the court was satisfied, inter alia, that, none of the members of the dissenting class would be any worse off under the scheme than they would be in the event of the “relevant alternative” (that being defined as whatever would be most likely to occur if the scheme were not sanctioned).