Under section 901A of the 2006 Act, a company in financial difficulties may propose a restructuring plan to some or all of its creditors designed to eliminate or reduce its difficulties. Each class of affected creditors votes on the plan, and if 75% in value of the votes cast for each class are in favour of the plan, then the court may sanction it. The plan then binds all creditors regardless of how they voted.
If any class votes against a plan then the court may exercise its “cross-class cram down” power under section 901G of the 2006 Act to overrule them.
Two conditions must be met for this. First, the dissenting class must be no worse off under the plan than they would be in the “relevant alternative”, which is what is most…