Retail Savings: Poundland Restructuring Plan receives judgment

After advising long-standing client Gordon Brothers on the acquisition of discount retailer Poundland earlier this year, the DLA Piper team acted for Poundland Limited through all aspects of the successful sanction of their Restructuring Plan in August 2025.

On 24 October 2025, Sir Alastair Norris handed down his full judgment, addressing some salutary lessons for those proposing Plans, and for dissenting creditors.

1. Engagement with creditors is key
   The judgment highlighted that Poundland had made serious attempts to engage with its creditors, particularly its landlords. Notwithstanding Poundland‘s efforts to engage, there had been no collective response from any class of landlord; and no articulated challenge to the plan. The absence of reasoned opposition at the sanction hearing spoke volumes.
   
   
2. Dissenting creditors - Put up or shut up
   After the Convening Order, solicitors for one multiple site landlord sought further information and entered into correspondence leading to a letter received after the plan meetings had concluded and five days before the sanction hearing), purportedly advancing “an alternative restructuring…that is better and fairer than the one proposed by Poundland”.  The letter simply set out proposals for said landlord to be treated substantially more favourably than other members of the relevant class. It did not say whether the additional benefits were to be taken from other class members or from other creditor classes or from those providing funding for the plan. It did not set out an alternative plan. The landlord did not appear at the sanction hearing.  Sir Norris echoed Snowden J‘s sentiment in Re Smile Telecom Holdings that dissentients “must stop shouting from the spectators’ seats and step up to the plate”.
   
   Sir Norris appreciated the difficulties faced by creditors. At the sanction hearing, dissenting creditors must present a coherent and comprehensive plan which (i) has a real prospect of implementation, and (ii) leaves the judge in genuine doubt as to whether the applicant’s plan is fair  –  “What the judge cannot be presented with is a jumble of incoherent requests for different treatment”. It was further noted that the engagement of Poundland with this landlord had begun before the circulation of the PSL and as such the course taken by it "was most unwelcome in this respect: it was also unwelcome and unhelpful in not engaging properly with the Court”.
   
   
3. Plan Company burden
   No dissenting creditor appeared at the sanction hearing to argue which principles would be violated by the restructuring plan or to argue that there is some other fairer and achievable plan.  Poundland, bearing the burden of persuading the Court that the restructuring plan should be approved, cannot be expected to argue the case for the dissenting creditors.
   
   Sir Alastair Norris shares the view of Richards J expressed in his judgment in Re Revolution Bars that in the absence of adversarial argument a judge can do no more than take a “high level” view of the restructuring plan.
   
   
4. The relevant alternative
   The Court is necessarily reliant upon the evidence of those to whom the management of Poundland has been entrusted as to what the relevant alternative is, but does not simply accept that evidence at face value. The Court evaluates the evidence in the context of what it perceives the commercial realities to be and in the light of any expert evidence.
   
   
5. Allocation of benefits
   The judgment further affirms that a “fair” restructuring plan must ensure a fair sharing of both the burdens and benefits among those whose rights are compromised, with the obligation on the Plan Company to persuade the Court that there is a fair allocation. An allocation of benefits report presented in evidence discharged the burden in this case.
   
   
6. Votes of classes that are not really impaired
   The judgment pointed out that the votes of classes that were not really impaired by the plan were “particularly puzzling”. Why would a creditor vote against the payment in full of your rent during the rent concession period (albeit at a different time) and of the creditor‘s property costs, and by that vote risk the cessation of all payments, the vacation of your property and the disorderly termination of your lease? Sir Norris commented that one possibility is that they were multiple landlords with leases in other classes who decided to “block vote” against the plan irrespective of the merits of the treatment of individual classes. Another possibility is that they did not consider the pending insolvency to be real (whatever the Explanatory Statement said).

The DLA Piper team has significant experience acting on the most complex and heavily contested Part 26A Restructuring Plans in the market, including Aggregate, Deep Ocean, NCP, Fitness First, and Revolution Bars. If you would like to discuss Part 26A Restructuring Plans, or any of the issues discussed in this article, please reach out to your usual DLA Piper contact.

You can read the full judgment here.