English restructuring plans: Lessons from Petrofac and Waldorf

The Court of Appeal's overturn of the Petrofac restructuring plan and the subsequent High Court rejection of the Waldorf plan have sent shockwaves through the restructuring market. Both cases raise hard questions about what constitutes a fair allocation of restructuring value, and what evidence companies need to justify it. For anyone considering the restructuring plan as a tool, these judgments demand close attention.  London Restructuring partners Katrina Buckley, Karen McMaster and Tim Watson, together with Restructuring Senior Knowledge Lawyer Chris Poel, are joined by Lisa Rickelton, Senior Managing Director at FTI Consulting, to unpack the commercial specifics of both cases, the Court of Appeal's reasoning in Petrofac, the knock-on impact on Waldorf, and the practical implications for future restructuring plan structures.   Our contributors discuss the specific commercial matters at play in the Petrofac case and why the Court of Appeal came to its decision; the impact of Petrofac on the Waldorf case, what amounts to a “fair” allocation of the benefits generated by a restructuring; how companies can strengthen their evidence to justify such allocations; and the merits or otherwise of possible alternatives to a restructuring plan.  For further details, we also recommend reading our previous article setting out a thorough consideration of the Petrofac Court of Appeal judgment and its implications.