Dobbies Garden Centres: What is a meeting?

This decision of the Scottish Court of Session concerned a restructuring plan.

Among other issues decided by the Scottish court, it had to decide what constituted a “meeting” for the purpose of a restructuring plan:

1. The only assenting class was the secured creditor class. In this class a single proxy attended representing nine creditors.
2. One of the other classes was the Class B3 Landlords. In this class only one creditor attended the meeting, voting against the plan.

As regards the issue in (2) above, the judge referred to the preponderance of English authority which was to the effect that a meeting in this context did require the coming together of two or more persons stating – though it was not necessary to decide the point – that he had some sympathy with the unsuccessful arguments in those cases, such that, at least for the purpose of a restructuring plan, it was enough to constitute a meeting, that the meeting was convened on proper notice, and that a meeting was held in the sense that a resolution was put to vote at the time and place specified in the notice.

In any event, applying the earlier judgment in Chaptre, the judge held that he did not need to decide the point since the Class B3 landlords were a dissenting class either by reason of the fact that the class was properly formed with the only attendee voting against, or by reason of the fact that the class was not properly formed given there was only one attendee and, in either case, the class could be crammed down by the assenting class.

As regards (1), the issue was however, not academic since this was the only assenting class and thus the only class through whom the cross class cram down power could be effected.

The judge stated that there was nothing in the language of the relevant statutory provision to suggest that a meeting could take place only if two or more natural persons came together. On the contrary, the section expressly provided for two methods by which a person could attend a meeting: "in person or by proxy". Even allowing that a meeting required the coming together of two or more persons, at least for the purposes of exercising the cross class cram down power, that could be achieved either by two or more creditors attending or being represented in person or by proxy, or by a combination of the two. It followed, disapproving the contrary conclusion in the earlier English case of In re Revolution Bars, there was no logic to the view that a meeting which was attended by two or more creditors by proxy was not a meeting simply because both or all had appointed the same person to act as their proxy.

The court went on to sanction the scheme.

In re Dobbies Garden Centre Limited [2024] CSOH 111, Court of Session

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