Radhika Goel, Advocate and LLM Graduate from Queen Mary University of London
ABSTRACT
Globally, jurisdictions have realized that mechanisms must be developed to help financially drained yet viable businesses to continue as going concerns. Restructuring plan is one such mechanism adopted under the English Law to rescue businesses. This mechanism under the UK regime has welcomed the concept of cross-class cram down. In simple terms, cross-class cram down is when the dissenting classes of creditors are crammed down for the implementation of the restructuring plan, where an absolute majority couldn’t be achieved. This paper assesses how this concept is put into play and the requirements under the English law that need to be satisfied for effective implementation of cross-class cram down and a balance is maintained between the interests of different classes of creditors as well as the interests of company and creditors. Furthermore, the paper will also, explain the practice of cross-class cram down in other jurisdictions such as United States of America, Singapore and India.
Keywords: Cram-down, class of creditors, restructuring plan, scheme of arrangement, dissenting classes.
