Update – Announcement of proposed scheme of arrangement, pursuant to Part 26 of the Companies Act 2006, for a full and final settlement in respect of surplus entitlements and the payment of statutory interest – Practice Statement Letter - 18 April 2018

Further to the announcement made on 22 December 2017 a copy of which can be accessed here and the update on 29 March 2018, the Joint Administrators are pleased to write to all known unsecured creditors to inform them of:

• the Joint Administrators’ decision to propose a scheme of arrangement;
• the objectives the proposed scheme is designed to achieve; and
• the composition of the meetings of creditors that LBIE will invite the court to convene for the purposes of voting on the proposed scheme.

A copy of the Joint Administrators’ letter to creditors (known as a “Practice Statement Letter”) can be accessed here.  The Practice Statement Letter is being sent in accordance with best practice, in order to enable creditors to consider the issues that will be put before the court at a hearing to convene the scheme meetings. The convening hearing is scheduled for 9 May 2018. The Practice Statement Letter provides information in relation to the terms of the proposed scheme, including the framework for the settlement of the remaining Waterfall Proceedings and a mechanism for the determination and payment of statutory interest.

We expect to provide further documentation including (i) the full terms of the proposed scheme and (ii) an explanatory statement regarding the background to the proposed scheme and an explanation of its terms and effect, on 10 May 2018. Based on this timeline, meetings of creditors to consider, and if thought fit, approve the proposed scheme are anticipated to be held at the end of May or early June 2018 and a final court hearing to sanction the scheme would take place shortly thereafter on or around the 13th June 2018.  

In light of the consequences of the judgment received on UK withholding tax from the court of appeal last year, the Joint Administrators will make any payments of statutory interest under the proposed scheme on a net basis (except for payments where the Joint Administrators have received an appropriate direction from HMRC to do otherwise).

The Joint Administrators have set out further guidance on UK withholding tax in a separate announcement.

In addition to the above, the Joint Administrators have issued their updated Progress Report which provides an update on all other matters relevant to the Administration.

Further updates in respect of the proposed scheme will be posted to the LBIE website as matters progress.