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 - 18 April 2018

Further to the announcement made on the 22 December 2017 a copy of which can be accessed here, the Joint Administrators are pleased to now 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, 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 are targeting the provision of 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 would be held at the end of May 2018 and a final court hearing to sanction the scheme would take place shortly thereafter in early June 2018. Subject to no new material claims emerging before the scheme becomes effective, the Joint Administrators are targeting making a payment of statutory interest this summer.

The Joint Administrators will set out further guidance and information in the coming weeks but we do want to advise creditors that where they may need to make relevant filings to determine their tax status with HMRC then they are encouraged to begin this process as quickly as possible.  HMRC have confirmed that any such requests should be directed to [both of the following HMRC email addresses:

contactus.largebusinesslondon@hmrc.gsi.gov.uk

dttteam.lbnottingham@hmrc.gsi.gov.uk].

In the interim, in light of the consequences of the judgment received on UK withholding tax from the court of appeal last, the Joint Administrators will make any payments of statutory interest to creditors on a net basis (except for payments in respect of which the Joint Administrators have received an appropriate direction from HMRC).

In addition to the above, the Joint Administrators have issued their updated Progress Report which will provide 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.