A corporate “restructuring” really can be good for business: since Prezzo’s Part 26A restructuring plan was sanctioned by the court on 5 July 2023 (Re Prezzo Investco Ltd, “Re Prezzo”) the group’s overall outlook has considerably improved. This positive turnaround is largely thanks to Prezzo off-loading its loss-making restaurants, and has helped keep the remaining 97 sites operational. Prezzo is also reportedly planning a foray into the world of takeaway pizza and pasta at train stations, allowing it to diversify its business model in the future. As the latest financial accounts state, “…with underlying supply issues of labour easing, inflation beginning to stabilise, the recruitment of a new executive team completed and locked-in deflationary benefits in utilities for 2024 and 2025, the outlook for Prezzo is positive”. It is heartening to see that a Part 26A Companies Act restructuring plan can result in a company returning to profitable trading. Too often – particularly in the retail/casual dining sector – restructurings implemented through one of the statutory mechanisms (scheme, restructuring plan or company voluntary arrangement) have only delayed the seemingly inevitable insolvency or merely facilitated an orderly wind-down of the business. So, the Prezzo case is a welcome reminder of the potential good which these procedures can do. 

Indeed, it has been interesting to follow the progress of various Part 26A restructuring plans in the last year. In a departure from Re Nasmyth and Re GAS, it was in Re Prezzo that the court actually sanctioned the cramdown of HMRC in favour of a fairer approach. For example in Re GAS the court did not allow a restructuring plan that saw HMRC potentially worse off. Ultimately, it’s good to see that what was predicted to be the “fair” outcome has – so far – played out successfully for Prezzo.