Restructuring Plans (RPs) under Part 26A of the Companies Act 2006 have been a lifeline for financially distressed companies since their introduction through the UK’s Corporate Insolvency and Governance Act 2020.
RPs enable businesses to renegotiate debts with creditors and shareholders and offer a court-approved mechanism to avoid formal insolvency. However, to date, for many SMEs the perceived costs and complexities of RPs have made them a less attractive option.
Traditionally, the formalities of RPs – court appearances, negotiations and extensive documentation – have been seen as barriers, pushing SMEs towards more familiar options like internal restructuring or insolvency. However, recent developments suggest a…