A UK court recently greenlit a restructuring plan for Argo Blockchain plc Argo, marking a first-of-its-kind decision for a crypto-mining business and setting a precedent for how creditors with limited recovery prospects should be treated.
Rescuing Argo: A Plan for Survival
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The plan aims to save Argo from administration and maintain its NASDAQ listing.
- Growler Mining will gain 87.5% ownership of Argo.
- Noteholders will receive 10% equity.
- Existing shareholders will hold 2.5% of the restructured company.
The rescue plan, spearheaded by Growler Mining, was designed to avert administration and, crucially, preserve Argo’s listing on the NASDAQ exchange. The proposal reshapes Argo’s shareholding structure, allocating 87.5% to Growler, 10% to noteholders, and a remaining 2.5% to current shareholders. This restructuring is supported by a capital reorganization specifically intended to meet NASDAQ’s bid-price requirements. While the plan necessitates delisting from the London Stock Exchange (LSE), shareholders are offered a matched-bargain facility and the option to convert shares into NASDAQ-listed American Depositary Shares (ADSs), ensuring continued trading opportunities.
What happens when investors don’t participate in restructuring plans? The court scrutinized whether retail investors had a genuine opportunity to participate, given the strikingly low turnout at class meetings—only 1.6% of noteholders and 3.2% of shareholders voted. An independently appointed retail advocate confirmed that Argo’s communications were clear and widely disseminated, leading the Court to attribute the low participation to investor apathy rather than procedural barriers.
A Meeting With No Attendees
The noteholder meeting presented a unique challenge. No noteholders attended, either in person or virtually, leaving only the Chair present and relying solely on proxy votes. This violated a requirement for at least two individuals to be present, as established in Re Altitude Scaffolding [2006] EWHC 140 Ch. Consequently, the noteholders were designated a dissenting class, triggering a more rigorous “cram-down” fairness test, despite the judge acknowledging that this outcome was “verging on Kafka-Esque.”
The Court’s Ruling on Fairness
Companies seeking court approval for restructuring plans must demonstrate a fair allocation of benefits across all creditor classes, proportional to their contributions. This fairness principle has been central to recent restructuring case law.
The Court determined that treating the noteholders as a dissenting class was appropriate and proceeded with the cross-class cram-down test. The judge concluded that the noteholders would fare no worse under the restructuring plan than in a scenario involving administration and liquidation, where estimated recoveries were less than 1 percent.
A key consideration for the Court was the fairness of value distribution between Growler, noteholders, and shareholders. Based on expert testimony, Mr Justice Hildyard accepted that Growler was providing the vast majority of the restructuring value through new capital, asset transfers, and debt write-offs. He also acknowledged that both noteholders and shareholders were receiving equity valued higher than what they would have been entitled to in an insolvency situation.
The Court dismissed arguments for eliminating shareholders entirely, noting that the additional equity allocated to junior stakeholders was essentially a “gift” from Growler and did not disadvantage creditors compared to the alternative scenario.
The judgment also addressed concerns raised by the retail advocate regarding low voter turnout, the impact of delisting from the LSE on liquidity, and comparisons to the absolute priority rules in U.S. Chapter 11 proceedings. The Court found that retail investors were adequately informed, alternative trading options remained available through Nasdaq ADSs or matched bargain facilities, and Part 26A of the Companies Act does not mirror U.S.-style priority rules.
A Warning About Timelines
While ultimately approving the plan, Mr Justice Hildyard cautioned against increasingly compressed timelines in restructuring cases, warning that the Court’s willingness to expedite proceedings should not be taken for granted. The Court’s concerns about the “breathless” timetable, driven by NASDAQ deadlines, align with the Court’s Practice Statement on schemes and restructuring plans, which took effect at the start of 2026.
Looking Ahead for Restructuring Plans
There were anxieties that decisions in Adler, Petrofac, and Thames Water would make restructuring plans too complex for many businesses, even small and medium-sized enterprises (SMEs). The Petrofac decision, in particular, highlighted the rights of “out of the money” creditors, even those expecting no recovery under alternative scenarios.
The Argo decision offers valuable guidance from the Court and underscores the potential usefulness of the restructuring plan process, even if it remains inaccessible to a significant portion of UK businesses.
[1] Saipem S.P.A and others v Petrofac Limited and another UKSC/2025/0140
