Landlords Beware, Cram Down Is Here

The Part 26A scheme entailed breaking the landlords down into five separate classes depending on the profitability of the leases in a similar way to the categorisation of leases in a retail CVA. Unlike a CVA, however, each class voted separately and the intention of the scheme companies was to use the new class cram down power in Part 26A to cram down dissenting classes.

At the convening hearing an ad hoc group of landlord creditors challenged the adequacy of the explanatory statement provided by the scheme companies. The court held that it was not appropriate to refuse to convene the scheme meetings or require the scheme companies to amend the explanatory statement because, inter alia, (1) the appropriate time to examine the adequacy of the explanatory statement was at the sanction hearing; and (2) commercially confidential disclosure might damage the business. The court held however that, due to the short notice period for the convening hearing, creditors who wished