Towards “orderly and efficient resolution”: the new practice statement in respect of schemes of arrangement and restructuring plans

On 18 September 2025, the Chancellor of the High Court, the Rt. Hon. Sir Julian Flaux announced the long-awaited publication of the updated Practice Statement in relation to schemes of arrangement and restructuring plans (the "New Practice Statement"). Revision of the existing Practice Statement was, in large part, driven by the rise in contested schemes and restructuring plans which, in turn, has put significant pressure on the Court system. As a result, the New Practice Statement seeks to streamline these restructuring proceedings and ensure a proportionate allocation of the Court's time and resources to them.

Background

On 18 September 2025, His Majesty's Courts and Tribunals Judiciary announced the publication of the New Practice Statement in respect of schemes of arrangement and restructuring plans under Parts 26 and 26A of the Companies Act 2006 (the "CA 2006") respectively.

A key objective of the New Practice Statement is to streamline Part 26 and Part 26A proceedings by facilitating the early identification and active case management of disputed issues, with a view to resolving these issues as expediently as possible and ensuring a proportionate allocation of the Court's time and resources.

The New Practice Statement revises the previous Practice Statement from June 2020 (the "2020 Practice Statement"). The 2020 Practice Statement had accompanied the enactment of Part 26A CA 2006, and was adopted against the backdrop of financial uncertainty arising out of the COVID-19 pandemic and a consequent increase in corporations seeking to implement financial restructurings.

The New Practice Statement applies to all cases where an application to convene meetings of scheme or restructuring plan creditors or members is to be dealt with at a convening hearing listed on or after 1 January 2026.

Key Changes

The New Practice Statement introduces a number of new requirements for scheme or restructuring plan companies and their representatives, and expands the scope of certain pre-existing requirements in the 2020 Practice Statement, consistent with its stated objectives of achieving the orderly and efficient resolution of issues between the parties and making effective use of the Court's time and resources.

(a) Claim form and listing note

The 2020 Practice Statement was silent as to when a claim form commencing proceedings under Part 26 or Part 26A CA 2006 had to be issued. The New Practice Statement requires the company propounding a scheme or restructuring plan to issue a claim form seeking the relevant order(s) prior to arranging any hearing date with the Court. The New Practice Statement:

(i) accounts for potential sensitivities around publicising the launch of a restructuring process and notes that "in an appropriate case" an applicant may apply for orders restricting access to the Court file pursuant to CPR 5, and/or preventing disclosure of the identity of the applicant company pursuant to CPR 39.2(4) (as relevant); and

(ii) applies this requirement only to schemes or restructuring plans which include a proposal to creditors or a class of creditors (i.e., the requirement does not apply to public takeovers by way of schemes of arrangement).

Pursuant to the New Practice Statement, the claim form must be accompanied by a 'listing note' to assist the Court with resource management and listing. The listing note must include: (i) time estimates for the convening and sanction hearings; (ii) an indicative timetable of the overall proceedings, including any likely appeal; (iii) a description of any issues likely to impact the timetable, including matters relevant to the company's financial position and/or matters likely to become contested issues in the proceedings; and (iv) any perceived urgency, and the factors giving rise to it (and when these factors arose).

The New Practice Statement also requires that a copy of the practice statement letter to creditors ("PSL") be filed with the claim form (or as soon as possible after the claim form is issued).

(b) Company evidence and bundles

The 2020 Practice Statement required the plan or scheme company's evidence to describe how creditors would be given notice of meetings convened to consider the scheme or restructuring plan. The New Practice Statement expands the scope of what must be covered in the company's evidence also to include the following:

(i) a list of issues identified by the company as matters for the convening hearing (which previously was not required prior to the hearing);

(ii) any required update(s) to the listing note; and

(iii) how the company intends to disseminate information to creditors or members after the convening hearing.

Most notably, in the case of a restructuring plan, if cross-class cram down is likely to be invoked, this must be referred to in the company's evidence, together with details of:

(i) any engagement with the creditors or members (and an explanation of any difference in the level of engagement with different creditors or members);

(ii) information provided to the creditors or members to date (and an explanation of any difference in the level of information with different creditors or members); and

(iii) any objection(s) to the restructuring raised by creditors or members and/or any alternative restructuring proposal and the nature of that proposal.

This reflects guidance issued by the Court of Appeal in the recent cases of Re Thames Water Utilities Holdings Ltd¹ and Re Petrofac Ltd². These judgements mark a shift away from the prior approach of the English Court in Re Virgin Active Holdings Ltd³ and subsequent High Court decisions, and reflect the prevailing expectation of the Court that companies will have (both prior to launch of the restructuring and throughout the process) engaged with all affected creditors, including out-of-the money creditors.

The company's evidence should include a copy of the final form of the proposed explanatory statement (including annexures). Changes to the content of the explanatory statement are detailed in sub-section ‎(c) below.

The New Practice Statement also expressly disapplies the requirement under CPR 8.5(1) that the company's evidence must be filed with the claim form, and instead requires that it be filed and made available to creditors as soon as possible (typically at least 14 days prior to the convening hearing).

(c) PSL and explanatory statement

Most of the requirements in the 2020 Practice Statement in relation to the content of the PSL and the explanatory statement (per ss. 897 or 901D of the CA 2006, as relevant) are unchanged. However, consistent with the emphasis on expediency which underpins the New Practice Statement, each of the PSL and explanatory statement must now include a short and/or tabular summary of their key terms at the start of the document. Readers must be clearly informed of how to access any documents incorporated into the explanatory statement.

Further, the New Practice Statement seeks to frontload matters by prohibiting the company from making material changes to the explanatory statement after a convening order without communicating such changes to the relevant creditors or members in sufficient time for them to consider any impact the changes may have on their vote (save where the Court permits an exception). The New Practice Statement encourages the company to seek the permission of the Court before making any such changes; failure to do so may be taken into account when the Court determines whether to sanction the scheme or restructuring plan.

(d) Responsibilities of objecting parties

The New Practice Statement requires objecting creditors to identify the nature of their objection(s) at least seven days before the convening hearing, where possible to do so. This should be as particularised as possible, and the objecting party should also propose any directions they consider desirable.

(e) Matters for the Court at the convening hearing

At the convening hearing, the Court will consider the issues submitted by the company (see sub-section‎ ‎(b) above), and what the appropriate number of creditor meetings (and their constitution) will be. The Court will also:

(i) seek to dispose of all matters that can fairly and properly be dealt with at the convening hearing, including, for example, issues of jurisdiction and international recognition of the scheme or restructuring plan;

(ii) consider (or will consider at a subsequent case management hearing) any directions necessary for the timely resolution of any issues (and in particular, contested issues) which are not suitable for determination at the convening hearing⁴, whether at the sanction hearing or otherwise;

(iii) consider and indicate whether it would be beneficial for the same judge hearing the convening hearing to hear the sanction application or other hearings; and

(iv) unchanged from the 2020 Practice Statement, consider the adequacy of the explanatory statement and may refuse to make a convening order if the explanatory statement is manifestly inadequate, although the Court will not approve the substance of the explanatory statement at this stage and it will remain open to any affected person to raise issues about its adequacy at the sanction hearing.

An affected member or creditor will not be precluded from raising at the sanction hearing an issue that could or should have been dealt with at the convening hearing; however, consistent with the 2020 Practice Statement, the Court will expect that any such creditor has good reason for not raising the issue at the convening hearing.

Conclusions

Much of the guidance in the New Practice Statement remains from the draft version circulated in May 2025. There were some indications of concern upon the reception of the draft, including: (a) the risk of introducing additional delay and/or complexity into proceedings; and (b) a potentially destabilising effect on businesses that might arise from extensive requirements to engage and negotiate with stakeholders (including out-of-the-money creditors). However, it is inevitably too early to predict what broader implications flow from the New Practice Statement, and whether they may in turn give rise to any further adjustment to practice standards across the industry.

It is clear, however, that there are several new practical considerations around the commencement of new schemes of arrangement and restructuring plans that parties and their legal representatives will need to navigate. These will need to be considered together with the developing jurisprudence in English courts as regards the treatment of out-of-the-money creditors and engagement and negotiation between companies and their creditors more generally.

_{1 [2025] EWCA Civ 475.
2 [2025] EWCA Civ 821.
3 [2021] EWHC 1246 (Ch).
4 Including, but not limited to: (i) defining or limiting the issues to be resolved either prior to or at the sanction hearing; (ii) setting an order and timetable in accordance with which the issues will be resolved; (iii) the service of witness and expert evidence (including the use of a single joint expert, or meetings of multiple experts); (iv) making further information available to persons affected by the scheme or restructuring plan; and (v) costs provisions.} 

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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