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HMRC v Part 26A: can you cram the Crown?

HMRC has recently had mixed fortunes when challenging ‘Part 26A cram downs’, as Lisa Rickelton, Alex Lewis and Abby Martin (FTI Consulting) report. 

As the UK economy continues to experience macroeconomic uncertainty following Covid-19 the risk of a recession remains elevated. High inflation and interest rates provide a challenge to businesses in a variety of sectors and the number of companies using insolvency and restructuring processes continues to rise.

The Part 26A restructuring plan (RP) introduced in 2020 has many features of the more widely known Part 26 scheme of arrangement (‘scheme’). However unlike a scheme the RP can be sanctioned by the court even where there is a dissenting creditor class using a process known as ‘cross-class cram down’ (explained below).

Recently a number of companies have attempted to ‘cram down’ HMRC using an RP and HMRC has had mixed results...

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