Key Takeaways
- The TG Jones restructuring plan demonstrates that courts may approve rent reductions for landlords in retail insolvency where the plan is fair and landlords would otherwise fare worse in an administration or liquidation.
- Acting quickly is critical, as restructuring plan processes involve strict court deadlines and creditor voting windows that can close within weeks.
- Ignoring notice of a restructuring plan risks losing your opportunity to challenge unfair terms or negotiate a better outcome.
- The High Court confirmed landlords can be bound by cross-class cram down even if they vote against a plan, but you may retain the right to terminate your lease.
- The judgment confirms that equity holders, such as private equity owners, may retain their stake if they contribute new funding and undertake business recovery risks.
- TG Jones clarifies that negotiation with the company can improve outcomes for creditors and is often more effective than outright opposition.
- Whether future rent concessions count as creditor contributions remains unsettled, meaning stakeholders should stay alert to future legal developments.
- Our solicitors at Go Legal advise landlords, creditors, directors and shareholders on restructuring plan strategies, creditor negotiations and director duties during periods of financial distress.
TG Jones Restructuring Plan: Implications for Landlords, Creditors and Retailers
On 5 August 2026, the High Court handed down judgment in Re TG Jones High Street Limited [2026] EWHC 2079 (Ch), sanctioning two interconnected restructuring plans under Part 26A of the Companies Act 2006. TG Jones, formerly the WH Smith high street business and acquired by private equity fund Modella in 2025, operates around 450 stores across England and Wales.
Severe financial distress had left TG Jones at risk of insolvency. The restructuring plans enabled access to vital liquidity, rationalised the lease portfolio by imposing rent cuts on loss-making stores, and compromised certain liabilities—avoiding administration or liquidation. The judgment from Mr Justice Hildyard sets out clear principles on:
- How the courts determine the fairness of restructuring plans
- Treatment of landlord creditors in retail restructurings
- Equity retention for owners
- The unresolved debate over whether future rent concessions qualify as creditor contributions
If you are a business owner, landlord, creditor, or director facing a proposed restructuring plan, this decision offers valuable guidance on your rights, the court’s priorities, and the risks of inaction.
Background: What Is a Part 26A Restructuring Plan?
The Legal Framework: Part 26A of the Companies Act 2006
A Part 26A restructuring plan is a court-sanctioned compromise between a company and its creditors or shareholders, introduced in 2020 as a flexible alternative to CVAs and traditional schemes. Sometimes referred to as a “super-Scheme” and modelled on the US Chapter 11 process, this mechanism allows troubled companies to restructure their obligations under court supervision.
The key innovation is the cross-class cram down. Unlike a CVA or scheme of arrangement, Part 26A plans enable the court to bind dissenting classes of creditors if:
- Dissenting creditors would be no worse off under the plan than in the “relevant alternative” (commonly administration or liquidation), and
- At least one class with a genuine economic interest in the relevant alternative votes in favour.
Part 26A restructuring plans are particularly effective for lease-heavy businesses such as retail and hospitality chains, enabling rationalisation of property portfolios and compromise of debts even without unanimous creditor support.
Go Legal’s team regularly advises on Part 26A plans, CVAs, administration, and informal workouts—acting for company directors, landlords, trade creditors, and shareholders navigating high-stakes negotiations.
The TG Jones Case: Facts and Structure of the Plans
A High Street Retailer in Distress
TG Jones, the trading name for the former WH Smith high street business, was sold to Modella, a private equity fund, in 2025. Despite the sale, TG Jones struggled with persistent losses across its 450-store portfolio, many of which were loss-making due to unsustainable rents and shifting shopping habits.
The Restructuring Challenge:
The immediate priorities for TG Jones were:
- Securing liquidity to support continued trading and turnaround
- Rationalising leasehold liabilities—targeting rent reductions for loss-making stores
- Managing debts to secured lenders, trade creditors, and tax authorities (HMRC)
Two interconnected restructuring plans were devised. Key features included:
- Access to essential liquidity: New funding was secured to stabilise operations.
- Lease rationalisation: Stores were categorised by profitability. Landlords of loss-making locations faced rent reductions but could terminate their leases instead if they chose.
- Compromise of other liabilities: Trade creditors, HMRC, and others were included in the plan structure, with each class treated according to commercial reality.
Stakeholder classes included secured lenders (if any), landlords (split by profitability), trade creditors, HMRC, and shareholders (primarily Modella).
After initial opposition—most notably from landlords connected with British Land—negotiations led to plan improvements. This constructive engagement resulted in the main landlords withdrawing their objections before the sanction hearing.
The Judgment: Key Findings
Mr Justice Hildyard’s Decision: Sanctioning the Plans
Fairness and Reasonableness
The Court stated the plans were approved only “after anxious and careful review.” A key finding was that the plans represented a genuine attempt at fair and reasonable restructuring, especially after negotiations led to improvements for landlords who had initially objected.
The fairness test asks:
- Is there a logical explanation for any differences in how creditors are treated?
- Is the restructuring benefit distributed fairly, according to each creditor group’s position compared to the relevant alternative?
Differential Treatment of Creditors
The judgment recognised that creditors may be treated differently if justification exists. Landlords of profitable stores, critical for business survival, received better terms; those of loss-making stores faced necessary rent reductions. Crucially, affected landlords retained the right to terminate their leases rather than be compelled to subsidise continued losses.
Retention of Equity by Modella
The retention of equity by Modella, TG Jones’s private equity sponsor, was one of the plan’s most debated features. The court found this acceptable for the following reasons:
- Modella made significant contributions, bringing in new money, providing guarantees or operational support.
- There were substantial risks associated with the plan—success was not guaranteed even after restructuring.
- Creditors (including landlords) were not clearly better off holding equity in a high-risk business than accepting the compromise offered.
This approach demonstrates a pragmatic judicial attitude: where equity holders are critical to funding the rescue and assume significant risk, courts do not automatically require their shares to be wiped out, provided creditors are not worse off than in liquidation.
The “Future Rent Concessions” Debate
One unresolved aspect of the case concerned whether landlords who agree to future rent reductions are making a “contribution” equivalent to new capital injected by investors. British Land, despite withdrawing formal opposition, attended the final hearing to argue that future rent concessions are a real economic sacrifice deserving special recognition. TG Jones maintained—following cases like Re New Look—that such reductions reflect existing financial reality rather than new investment.
The court ultimately found it unnecessary to rule on this issue in TG Jones but noted that the Plan Company’s argument appeared stronger. This question remains open and will likely shape negotiation dynamics in future cases.
Practical Implications: What Does the TG Jones Judgment Mean for You?
For Distressed Retailers and High Street Businesses
- Part 26A restructuring plans offer a powerful rescue tool for lease-heavy businesses where landlords are prominent creditors.
- You can achieve rent reductions and lease rationalisation without landlord consent by showing that landlords would be no worse off under the plan than in liquidation or administration.
- Negotiation pays: TG Jones improved its plan after landlord objections. Flexible, fair offers make court sanction more likely.
- Equity holders may keep their interest, especially where they contribute significant new value and accept risk.
For Landlords
- Engaging in negotiation is essential. Courts respond favourably to plans refined through genuine dialogue and compromise.
- If your lease is affected, you will often retain the right to terminate rather than be compelled to accept reduced rent.
- The legal weight of future rent concessions remains undecided—landlords should push for clear contractual recognition in negotiations.
- Early, specialist legal advice ensures your vote and any objections shape the outcome.
For Creditors
- Courts closely compare what creditors would receive under the plan versus liquidation. If plan recoveries are higher, you could be bound even if you vote to reject the plan.
- Scrutiny is applied to whether equity holders genuinely deserve to retain their stake. However, where equity is making a real contribution, courts can permit retention.
- Active engagement and early dialogue increase the likelihood that your interests are considered.
For Directors
- A Part 26A plan provides a flexible and potent route to restructure, but comes with complexity, costs, and court involvement beyond a CVA.
- Robust planning and early valuation evidence—especially around the “relevant alternative” (usually liquidation)—is critical to the plan’s success.
Related Cases & Legal Context: Retail Restructuring Trends
The TG Jones decision reflects a growing trend in English law, whereby courts are prepared to use restructuring plans to support the rescue of large, lease-heavy retail and hospitality businesses.
Recent cases include:
- Re New Look Retailers Ltd [2021] EWHC 1209 (Ch): Fashion retailer with rent reductions imposed on landlords.
- Re Virgin Active [2021] EWHC 1246 (Ch): Cross-class cram down of landlord creditor group for a gym operator.
- Re Poundstretcher Ltd [2026] EWHC 1438 (Ch): Discount retailer facing similar restructuring challenges.
- Re The Great Annual Savings Company (2023).
Key patterns:
- Lease rationalisation places significant impact on landlords.
- Cross-class cram down is commonly deployed against dissenting landlord classes.
- Courts are prepared to allow equity holders to retain their stakes when they make meaningful contributions and bear risk.
- The norm is for negotiation and plan refinement between the convening and sanction hearings.
How Go Legal Can Help
Expert Restructuring and Insolvency Advice
Our team of commercial litigation and insolvency solicitors at Go Legal provides practical, senior expertise for any business, creditor, director or landlord involved in Part 26A restructuring plans or related rescue routes.
We assist with:
- Strategy, negotiation and analysis of Part 26A restructuring plans, including court applications and creditor engagement
- Company Voluntary Arrangements (CVAs), for less complex restructurings
- Administration and pre-pack sales, protecting value where possible
- Informal creditor workouts and standstill agreements
- Director duties in financial distress, including wrongful trading and risk management
- Acting for creditors, landlords, suppliers, HMRC, or lenders in negotiations or insolvency
- Disputes over debt and winding-up petitions
We offer senior-level expertise at highly competitive rates, with fixed-fee packages and flexible funding where appropriate. Our initial consultation is free and gives you a clear action plan, with urgent response for crisis matters.
Contact us today:
020 7459 4037 or book a free consultation.
Frequently Asked Questions: Restructuring Plans and the TG Jones Case
What is a Part 26A restructuring plan?
A Part 26A restructuring plan is a court-approved compromise between a financially distressed company and its creditors (and sometimes shareholders), introduced under the Corporate Insolvency and Governance Act 2020. It allows a company to renegotiate debts, shed unprofitable contracts (such as leases), and access new funding—while binding dissenting creditors through “cross-class cram down” if the court is satisfied they would be no worse off than in the alternative, usually liquidation.
What was the outcome of the TG Jones case?
On 1 July 2026, the High Court sanctioned two interlinked restructuring plans for TG Jones (formerly WH Smith high street, now owned by Modella). The plans delivered liquidity, rent reductions for loss-making stores, and restructured liabilities. Following negotiation, landlord opposition was withdrawn and Mr Justice Hildyard’s written judgment followed on 5 August 2026.
Can landlords be forced to accept rent reductions in a restructuring plan?
Yes. If the court sanctions a plan using its cross-class cram down powers, dissenting landlords may be bound provided the court is satisfied they would be no worse off than in administration or liquidation. In TG Jones, affected landlords kept the right to terminate their leases—a factor the court considered fair.
Can shareholders (equity holders) keep their stake in a restructuring plan?
Potentially, yes. In TG Jones, the private equity shareholder (Modella) was allowed to retain its stake because it contributed significantly to business rescue, assumed risk, and creditors were better off than in a wind-down. Courts are less likely to allow equity retention if shareholders do not make new contributions.
How does a restructuring plan differ from a CVA?
| Feature | Part 26A Restructuring Plan | CVA (Company Voluntary Arrangement) |
|---|---|---|
| Court involvement | Yes (hearings at key stages) | No (unless challenged) |
| Binding dissenting creditors | Yes (cross-class cram down) | No (75% approval in a single vote required) |
| Complexity & cost | Higher (evidence, hearings) | Lower (cheaper and quicker) |
| Flexibility | Greater (can bind secured/HMRC) | More limited (harder to bind landlords) |
| Best for | Large, lease-heavy, multi-class restructurings | Smaller/simpler company cases |
Should I oppose a restructuring plan if I am a creditor?
Not always. In TG Jones, landlords who initially opposed achieved improved terms through negotiation and then withdrew objection. Engaging early and constructively often delivers a better result than simply voting against. Always seek advice on the plan’s fairness and comparative outcome.
How long does a restructuring plan process take?
Timings vary by case, but three to six months from initial proposal to sanction is typical. In TG Jones, the process moved from convening to sanction in under two months, assisted by settled landlord opposition and plan modification.
Is a Restructuring Plan Right for Your Business?
The TG Jones judgment affirms that Part 26A restructuring plans are a powerful, flexible solution for companies in financial crisis, especially in the retail and hospitality sectors. The courts’ balanced approach to fairness, creditor contribution, and equity retention means that carefully structured plans—grounded in negotiation—have a strong chance of success, even when facing initial creditor resistance.
If you are managing distress, or if you are a landlord or creditor presented with a restructuring plan, the right legal advice now can make a decisive difference to your recovery and commercial interests.
Our restructuring and insolvency team helps you:
- Choose between Part 26A, CVA, administration, or informal renegotiation
- Strategically negotiate with opposing parties
- Prepare and present your case before the court
- Safeguard your interests throughout the process
Contact us now for a free, no-obligation consultation: 020 7459 4037 (24/7) or book a free consultation.
