On 7th February 2024, Mr Justice Richards heard closing submissions in the English High Court for a contested sanction hearing for Aggregate Group’s Part 26A restructuring plan. This hearing presented one of the first opportunities to analyse how the Adler decision will affect restructuring plans going forward.

Aggregate are a German real estate group whose plan proposes to restructure three classes of debt to extend the maturity of senior debts by two years and discharge junior debts. The group hope this plan will secure €190 million in new money, which will be used to recommence development of an prominent unfinished shopping boulevard in Berlin.

Aggregate’s holding company, Project Lietzenburger Straße Holdco (PLSH), represented by Tom Smith KC and two senior creditors of the project, represented by David Bayfield KC argued for the sanction of the modified plan. While J. Safra Sarasin, a tier 2 debtholder represented by Charlotte Cook and Chapelgate Credit Opportunity Master Fund, a junior creditor represented by Adam Al-Attar KC questioned the legitimacy of sanctioning the plan. The interpretation of Adler was a hotly contested topic throughout closing submissions, with all four counsels dissecting Lord Justice Snowden’s judgement, in an effort to support their arguments.


Adler emphasised the fairness test, reiterating the notion that the court must be satisfied that the plan is fair, while considering alternatives for a better or fairer substitute. The main issue before Mr Justice Richards was the question of the relevant alternative. Tom Smith KC and David Bayfield KC submitted that the alternative to the proposed plan would be liquidation. The argument followed that, in the event of liquidation, the boulevard development would be sold ‘as is’ for substantially less than gross development value, leaving the dissenting creditors with nothing. Therefore, the creditors would be no worse off as they would receive something from the plan, rather than nothing from liquidation. In contrast, Charlotte Cook suggested that if the option of a part 26A plan is removed, the creditors would reconsider other options, rather than allowing the massive cash-loss that would result from liquidation. This reconsideration would allow the creditors to overcome the unanimity threshold required to implement a restructuring plan in Luxembourg. Evidently, the court’s determination of the relative alternative will be paramount in the outcome with regards to fairness.

Give and Take

Throughout Adler, key emphasis was put on the requirement of ‘give and take’ in an arrangement rather than a mere confiscation of rights. This subject came to light in Aggregate, with the group’s offer of €200,000 to tier 2 and junior creditors to drop their claims being compared to expropriation. Once again, the question of relevant alternative is critical. Tom Smith KC suggested that the standard established in Adler of “modest” compensation is met by the modified plan, as the compensation proposed is more than the creditors would receive in the alternative, being liquidation and pari passu distribution. It will be interesting to see if the High Court agree with the ‘something is better than nothing’ approach to the give and take requirement.


An intriguing take-away from this hearing was the submissions in relation to relevant jurisdiction and forum shopping. Despite PLSH being the Luxembourg-incorporated holding company of a German group, Tom Smith KC submitted that there was sufficient connection with England to sanction the restructuring plan as PLSH’s center of main interests (COMI) was in England. Tom Smith KC recognised that the COMI was converted to England to benefit from more advantageous insolvency legislation, but submitted this is well within their rights. The opposing creditors did not dispute this submission, but Charlotte Cook instead argued that COMI is a factual matter and the conditions are not met. It was argued that PLSH’s relocation to London did not satisfy the permanence requirement and was an illusion rather than a substantive relocation, due to lack of outward facing presence in England. It was further argued that this is a form of ‘bad forum shopping’ as it was an attempt to evade debts which could be written off under the Part 26A plan, but would not be under the Luxembourg plan. This presents an interesting dynamic between utilitising COMI while avoiding bad forum shopping.

Going forward

Mr Justice Richards reserved judgement, recognising this as an important and complex case with many nuances to consider. With Adler already being subject of much scholarly commentary and multiple interpretations being forwarded in submissions, Mr Justice Richards must now weigh up the contrasting views and outline his understanding of the case and its effects. Mr Justice Richards observed that money is short for Aggregate, who want to continue development, so time is of the essence. The embargoed judgment is expected within three to four weeks, which could provide significant insight into how the courts will apply Adler in practice.