In Re Waldorf Production UK plc, the High Court sanctioned a contested restructuring plan facilitating the sale of the Waldorf Production Group to Harbour Energy for $205 million, cramming down HMRC as a dissenting creditor following a three-day sanction hearing in April 2026.
The judgment — one of the first contested plans sanctioned after the Court of Appeal's landmark decision in Petrofac — confirms that the Court has jurisdiction to cram down HMRC notwithstanding its special status, that the "no worse off" test under s. 901G3 CA 2006 is construed narrowly to assessing the value of existing rights being compromised (rather than broader considerations such as the impact future tax relief), and that the allocation of restructuring benefits was fair in circumstances where HMRC was, as a matter of fact, better off under the Plan than in the relevant alternative.
Whilst much of the judgment focuses principally on issues related specifically to HMRC, it offers several key takeaways for future restructuring plans more broadly: (1) the critical importance of genuine negotiation with all stakeholders (including the pioneering use of mediation, as proposed by Milbank) and the need for all creditors to engage meaningfully even where they intend to oppose the restructuring plan; (2) the need to demonstrate substantive fairness in the allocation of consideration (which is often a fact specific exercise); and (3) the Court's willingness to recognise commercial pragmatism in its exercise of discretion, particularly where a heavily negotiated transaction represents the best outcome reasonably obtainable in the circumstances.
The Court declined to grant HMRC permission to appeal the judgment, although HMRC remains entitled to seek permission to appeal from the Court of Appeal directly. As things stand today, the judgment not only offers further clarity on the position of HMRC vis-à-vis restructuring plans, but also represents a welcome step forward in developing certain key themes within the broader Part 26A jurisdiction.
