Clintons Puts Its Cards on the Table: Part 26A Restructuring Plan Sanctioned

On 24 August 2023, the English courts sanctioned a Part 26A Restructuring Plan for Esquire Retail Limited, trading as Clintons, with distinctive treatment of business rates.

Esquire Retail Limited, trading as the greeting card retailer Clintons ("Clintons"), has successfully completed a financial restructuring implemented by way of a restructuring plan under Part 26A of the Companies Act 2006 (the "Restructuring Plan"). Despite the closure of some 156 stores since 2019, the ongoing economic challenges facing high-street retailers have meant that Clintons was due to face an imminent liquidity crisis. The sanction of the Restructuring Plan achieves the rescue of Clintons (a stalwart of the high-street originally founded in 1968) as a going concern. 

Clintons is one of the first mid-market companies to successfully achieve a cross-class cramdown through the use of a restructuring plan. Mr Justice Michael Green, who sanctioned the Restructuring Plan at a hearing on 24 August 2023, noted the importance of such tools being accessible to small and medium-sized enterprises.  

The Restructuring Plan stands apart from recently sanctioned plans in that it compromises liabilities for business rates across its portfolio without seeking to compromise liabilities owed to its entire landlord community. Three of the six classes of creditors voted in favour of the Restructuring Plan (including two classes of creditors comprising local authorities in respect of business rate liabilities). Of the three dissenting classes, only one class of creditors (comprising landlords of sites that Clintons intends to close) actively voted to reject the Restructuring Plan. The two remaining classes of dissenting creditors (comprising landlords and local authorities relating to sites historically operated by Clintons) did not cast any votes. 

Jones Day advised Esquire Retail Limited, trading as Clintons, on its financial restructuring.

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