Evolution of the super scheme: Fürst Group restructuring plan sanctioned

Following the second longest sanction hearing in restructuring plan history, and the only sanction hearing yet to morph into a second convening hearing, the Part 26A restructuring plan proposed by Project Lietzenburger Straße Holdco S.à.r.L has been sanctioned. The plan is part of a highly contested, complex, cross-border restructuring of more than EUR1billion of debt documented under German law.

It involved:

• accessing the UK Super Scheme regime via a COMI shift;
• a comprehensive balance sheet recapitalisation, including the provision of a new super senior facility to address liquidity and cost overruns associated with the project;
• an innovative bridge funding structure provided by existing senior creditors to provide urgent liquidity to stabilise the plan company prior to completion of the restructuring;
• a reset of senior debt maturities; and
• cancellation of “out of the money” ssubordinated debt instruments. These measures and the successful completion of the plan company’s landmark Part 26A restructuring plan, now stabilises the Group’s financial position and will permit the Group's redevelopment project on the Ku’damm to recommence.

Key takeaways from the case are:

• Out of the money creditors can be excluded from voting and are not entitled to share in the restructuring surplus;
• COMI shifting is effective;
• Dissenting creditors wanting to challenge valuation must provide their own evidence.