Evolution of the super scheme: F rst Group restructuring plan sanctioned

Following the second longest sanction hearing in restructuring plan history, and the only sanction hearing yet to morph into a second convening hearing, the Part 26A restructuring plan proposed by Project Lietzenburger Stra e Holdco S. .r.L has been sanctioned. The plan is part of a highly contested, complex, cross-border restructuring of more than EUR1billion of debt documented under German law.

It involved:

• accessing the UK Super Scheme regime via a COMI shift;
• a comprehensive balance sheet recapitalisation, including the provision of a new super senior facility to address liquidity and cost overruns associated with the project;
• an innovative bridge funding structure provided by existing senior creditors to provide urgent liquidity to stabilise the plan company prior to completion of the restructuring;
• a reset of senior debt maturities; and
• cancellation of “out of the money” ssubordinated debt instruments. These measures and the successful completion of the plan company s landmark Part 26A restructuring plan, now stabilises the Group s financial position and will permit the Group's redevelopment project on the Ku damm to recommence.

Key takeaways from the case are:

• Out of the money creditors can be excluded from voting and are not entitled to share in the restructuring surplus;
• COMI shifting is effective;
• Dissenting creditors wanting to challenge valuation must provide their own evidence.