On 1 July, the High Court has sanctioned two restructuring plans for TG Jones High Street Limited and TG Jones Retail Holdings Limited under Part 26A of the Companies Act 2006. The companies operate the former WH Smith UK high street business, which was sold in 2025 and rebranded as TG Jones. The court recorded that the business consisted of 451 stores, most of them in the UK, and was in serious financial distress.
For retailers, landlords, suppliers and other creditors, the decision is a useful example of how restructuring plans can be used where a business is trying to avoid insolvent administration. It also shows the court’s close scrutiny where a plan affects different creditor classes in different ways.
A restructuring plan is a court supervised process that can allow a company in financial difficulty to compromise debts or liabilities with creditors or members, provided the statutory and fairness requirements are met.
What did the High Court decide in the TG Jones restructuring plan?
Mr Justice Hildyard sanctioned two inter-conditional restructuring plans concerning TG Jones High Street Limited and TG Jones Retail Holdings Limited. The court described the purpose of the plans as saving the companies from collapsing into insolvent administration by allowing access to liquidity, rationalising the leasehold estate and compromising certain liabilities.
The court was not asked to approve a routine compromise. The judge described the plans as complex and far-reaching. They had been amended after criticism from landlords led by British Land plc, and the court had received extensive evidence and expert reports.
The court’s decision was to sanction both plans. The main reason was that the court accepted that the relevant alternative was a value-destructive administration which would produce lower returns for dissenting creditors than the plans.
What is a Part 26A restructuring plan?
A Part 26A restructuring plan is a statutory procedure under the Companies Act 2006. The Government describes it as a debt restructuring scheme or plan that allows companies to seek court, shareholder and creditor approval for a restructuring.
In practical terms, a restructuring plan can be used where a company is in financial difficulty and needs a formal compromise with creditors or members. It is often considered where the alternative may be administration, liquidation or another formal insolvency process.
- A key feature is that, in appropriate cases, the court can approve a plan even where one or more classes of creditors do not support it. This is often described as cross-class cram-down.
- The TG Jones decision shows that the court will scrutinise that power carefully, particularly where the affected creditors are landlords, suppliers or public bodies.
Directors considering formal restructuring should usually look at the wider company rescue options available before administration so that any proposal is supported by evidence, timing and a realistic comparison with the alternatives.
Why did creditor treatment matter in the TG Jones plans?
Creditor treatment was central to the decision. Mr Justice Hildyard expressly considered whether it was proper and fair to impose the plans on dissenting creditors where the interests of supporting creditors were different from those who opposed the plans.
- The court noted concern that only one class of landlord creditors had approved the plans by the required majority, while other more affected landlord classes were to be crammed down.
- The court also noted that unsecured creditors, including non-core suppliers and business rates creditors, would have the amounts owed to them reduced.
However, the judge accepted that the plans gave dissenting creditors a better outcome than the relevant alternative. The judgment also recognised the value of constructive negotiation, noting that modifications secured by the British Land-led landlord group improved the position for landlord creditors.
This matters because restructuring plans are not judged only by whether they help the company survive. The court must consider whether the plan is fair in the context of the realistic alternative.
What does the decision show about avoiding administration?
The TG Jones decision shows that a restructuring plan can be a rescue tool where the evidence supports the conclusion that administration would be worse for creditors.
The court accepted that the relevant alternative was a value-destructive administration involving piecemeal and accelerated distressed sales of stock. That finding was central to the decision to approve the plans.
For directors, this underlines the importance of evidence.
- A company seeking approval for a restructuring plan will need credible financial information, a clear explanation of the alternative outcome, and evidence showing why the proposed compromise produces a better result than administration.
- For creditors, the decision shows that opposing a plan requires more than dissatisfaction with the proposed treatment. The court will look at the likely outcome under the plan compared with the realistic alternative.
Where a company is already close to formal insolvency, directors should also understand what happens if the business enters company administration, including how control, creditor claims and business rescue options may change once administrators are appointed.
What should directors and creditors take from the TG Jones decision?
Directors should take three practical points from the decision.
- First, early restructuring advice matters. The court’s analysis focused heavily on whether the plans had a proper evidential foundation and whether they gave creditors a better outcome than administration.
- Second, creditor communication matters. The plans had been amended following landlord criticism, and the court recognised the value of constructive negotiation.
- Third, directors should not assume that a rescue proposal will be approved merely because the company is distressed. The judge expressly considered whether the court should sanction plans that imposed significant discounts on dissenting creditors.
Creditors should also take the decision seriously. A restructuring plan may affect creditor rights even where a creditor has not supported the proposal. Creditors who receive notice of a plan should review the proposed treatment, the creditor class structure, the comparison with the relevant alternative, and whether they have grounds to object.
If creditor pressure has already escalated beyond negotiation, directors may need separate advice on how to defend a winding up petition and whether the company still has a viable route to stabilisation.
Conclusion
The TG Jones restructuring plan decision is a measured example of the court’s approach to distressed retail restructuring. The court sanctioned the plans, but only after careful consideration of creditor treatment, landlord objections, the relevant alternative and the prospects of the plans achieving their purpose.
- For directors, the decision reinforces the need to act early, prepare evidence and understand how today’s restructuring decisions may affect later insolvency risk.
- For creditors, it shows why prompt engagement is important where a restructuring plan may compromise debts, lease rights or other claims.
If your business is considering restructuring options, or if you are a creditor affected by a proposed restructuring plan, specialist advice can help you understand your position before decisions become harder to control.
