River Island Holdings Limited, Re

1. On 8th August 2025 I approved a restructuring plan under Part 26A of the Companies Act 2006 (“the 2006 Act”) upon the application of River Island Holdings Limited (“the Plan Company”). These are my reasons for doing so.

2. The Plan Company is an intermediate holding company which wholly owns River Island Clothing Company Limited and River Island Fashion Limited, (together “the Group”) which, along with two other wholly-owned subsidiaries, are the operating companies of the business. The business is engaged in the design and retailing of clothing through three channels; (i) 223 (at the commencement of the restructuring 224) leasehold units; (ii) online; and (iii) utilising third-party sellers (wholesale, franchise, concession and consignment). The business has seen a steady decline of minus 3% on a like-for-like basis over a number of years: and within the business there has been a change of emphasis. There has been a growth in online sales, which has increased the cost base of that element of the business (through additional warehousing and distribution costs) but without any corresponding reduction in the cost of the stores, which themselves have experienced reduced in-store footfalls and sales, in particular in secondary locations. The change in consumer behaviour and the decline in some trading locations has meant that for some stores the passing rents are significantly above market levels. Lately, increased National Insurance contributions and a rise in the “living wage” have increased financial pressure by adding an extra £9.4 million to the annual cost base of the business. The present problem

3. These financial difficulties have now come to a head. The business as a whole is unable to pay its debts when due. There is an immediate liquidity shortfall of some £43 million, and although there will be a brief respite over the Christmas 2025 trading period, the negative cash flow will resume and rapidly lead to a shortfall of some £50 million. What is required to assure equilibrium is an immediate adjustment of some £54 million in the financial position.

4. A brief summary of the present funding arrangements is as follows: (a) the Plan Company, its holding company and one of its subsidiaries have the benefit of a secured term loan of £240 million granted by Blue Coast Finance Ltd (“Blue Coast ”). Blue Coast and the Plan Company are in the same ultimate beneficial ownership but are independently managed and run as two commercially separate entities (as the evidence of their recent mutual dealings establishes to my satisfaction). The facility is utilised and in default with some £271 million now due (inclusive of unpaid interest and fees). (b) The same borrowers have the benefit of a secured Revolving Credit Facility (“RCF”) also provided by Blue Coast. But this cannot be drawn because the borrower group cannot demonstrate financial viability over the next 12-month period, which is a condition of drawdown. (c) The Plan Company has an established banking relationship with Barclays, which has granted a £20 million unsecured overdraft facility. This provides essential working capital and does not form part of the intended restructuring. From July 2025 it has been guaranteed by Blue Coast. (d) The Group has foreign exchange contract arrangements with both Barclays and NatWest. These again are operationally essential and do not form part of the intended restructuring. (e) The Group has various supplier finance agreements (also now guaranteed by Blue Coast) enabling suppliers to be paid immediately by finance institutions which are then reimbursed by the Group. These again are operationally essential and do not form part of the intended restructuring.

5. A summary of the Plan Company’s other liabilities is as follows (in part arising under a Contribution Deed dated 20 June 2025): (a) there are liabilities for rent, service charge, insurance and other payments under the 223 leases of the business’s stores, headquarters and distribution centre, together with accrued or contingent liabilities for dilapidations; (b) there are liabilities for unpaid Business Rates in respect of those stores; (c) there are liabilities to general trade creditors (including liabilities arising from leases which have already determined). Addressing the problem

6. The boards of the Plan Company and of the Group formulated and intend to implement “a transformation plan” to reshape the business to align it with current trading conditions. This transformation plan involves operational improvements, cost rationalisations (there has already been a reduction in headquarters staff) and strategic investment (particularly in the refurbishment of stores and an upgrade in IT). The restructuring plan submitted for sanction forms part of that exercise.

7. The boards have undertaken a detailed analysis of the retail operation. The primary metric has been store profitability: the touchstone is a minimum profitability threshold of £100,000 (or 10%) after allocation of central costs in order to justify the requisite investment. This has been ascertained by reference to FY24 performance reviewed in context i.e. adjusted for the effect of any special factors. This has then been compared with the forecast for FY25. This data has then then been mapped by reference to the location of each store (High Street, shopping centre, retail park, et cetera including overlapping catchment areas) in order to make a genuine assessment of the prospective commercial viability of the unit. For each unit the passing rent has then been compared with the estimated rental value in the current market. Account has then been taken of the physical condition of each unit in order to assess the investment required to induce the necessary turnaround.

8. This exercise has established the following: (a) there are nine stores which are straightforwardly loss-making after attribution of direct central costs; (b) there are 24 stores that are marginal on that basis but are on a downward trend and, being in sites where customers no longer shop, keeping them open would divert resources from more profitable locations; (c) for these two categories of store ultimate closure is planned after the end of the Christmas 2025 trading period; (d) there is then a tranche of 71 stores which are in suitable locations and could be made viable in the long term if short-term reductions in cost could be achieved, the measure of the reduction required being calibrated by reference to their prospective viability; (e) for this tranche of stores amendment of lease terms is proposed, for most (but not all) a rent concession period of 36 months from the Effective Date of the plan; (f) this leaves 97 UK based units (including the headquarters and distribution centre) which will continue on present term and so are excluded from the scope of the plan, together with 22 units located in Ireland (excluded on jurisdictional grounds).

9. The methodology is familiar and has been adopted in other retail rescues: but it is important for the Court to be sure that it has been conscientiously applied. Having considered the evidence, I am so satisfied. The Restructuring Plan

10. A restructuring plan embodying these proposals was set out in a Practice Statement Letter of 20 June 2025, was the subject of engagement with the British Property Federation and with a leading agent representing some landlords and was debated with those individual creditors took a proactive role. Thus, consensual variations have been effected to the leases of the stores in Reading and Oxford Street, and to the commercial arrangements with the IT suppliers and vehicle suppliers (amongst the general creditors). In each case the variations agreed have been in line with what is proposed in the restructuring plan in relation to the relevant liability and I am satisfied have not prejudiced the interests of other creditors in the same class. I would note that some Business Rate Creditors have resisted at contested hearings any adjournment of a liability hearing (and have done so not only after the sending of the Practice Statement Letter but even after the making of the Convening Order). No Business Rate Creditor appeared at the sanction hearing and so I could not discover what might lie behind this policy: but on its face the policy seems regrettable – an unnecessary cost to the general body of rate and taxpayers, an unnecessary expense for a company in financial distress and an unnecessary burden upon an overstretched judicial system.

11. The proposed restructuring is to be funded by Blue Coast by means of an extension of its existing facilities to a new maturity date (31 December 2028) and the provision of new money by means of an immediate £35 million RCF (enhanced by an additional £5 million on 31 January 2026). A report of Pricewaterhouse Cooper LLP (“PwC”) in evidence establishes that this funding is provided on considerably more favourable terms (as regards interest rates and arrangement fees, and as regards the capitalisation of accruing liabilities) than would be available in the market and most notably lacks any provision for equity warrants such as might be expected in relation to such “rescue funding” provided by other market operators. In addition, Blue Coast will release and discharge all unpaid fees and waive all existing breaches. This continued and additional funding is the principal contribution to the financial adjustment required to bring about sustainable viability. The other element is the contribution of the compromised creditors (landlords and others) and to that I now turn.

12. The Class A Landlords own premises where only the smallest adjustment is required to achieve sustained viability of store operation. The restructuring plan generally contemplates amendments to leases for the period of 36 months from the Effective Date (“the Rent Concession Period”). But for Class A leases all rent, and all service charges, insurance charges, utility payments and like charges (“property costs”) will be paid in full during the Rent Concession Period and will be so paid on a monthly basis. All Class A leases will expire during the Rent Concession Period, and that will give rise to dilapidation claims which could destabilise recovery. Under the restructuring plan these dilapidation claims are to be released.

13. The Class B landlords own premises where profitability is marginal but where the Plan Company wishes to continue to trade during the remainder of the lease term. Differing adjustments are required to achieve sustained viability.

14. For premises owned by the Class B1 landlords rent arrears (effectively the June 2025 quarter-day rent) will be released; all property costs will be paid in full during the Rent Concession Period according to the lease term; 75% of the contractual rent will be paid monthly during the rent the Rent Concession Period; there will be no rent review during that period. 8 out of the 13 leases in this class are due to expire during the Rent Concession Period and any dilapidation claims so arising are to be released. Continuing leases will revert to contractual terms at the conclusion of the Rent Concession Period.

15. The leases of the Class B2 landlords are to be amended in the same way save that during the Rent Concession Period only 60% of the contractual rent will be paid. 7 out of the 10 leases in this class are due to expire during the Rent Concession Period. Likewise for the Class B3 landlords, save that during the Rent Concession Period only 50% of the contractual rent will be paid (during which period 7 out of the 9 leases in this class will expire). For the Class B4 landlords 25% of the contractual rent will be paid during the Rent Concession Period (during which period 5 out of the 6 leases in this class will expire).

16. Class C consists of premises whose performance or location mean that they cannot be retained in the medium or short term.

17. Class C1 are landlords of premises which are marginally profitable (before allocation of central costs) but are on a downward trend and cannot be sustained on a continued loss-making basis. Existing arrears are to be released, the contractual rent reduced to nil (though all property costs will be paid in full during the continued occupation). 21 out of the 24 leases in this class will expire during the Rent Concession Period and any dilapidations claims then arising will be released. In practical terms a landlord in this class may chose to leave the Group tenant in occupation for the remainder of the lease (thereby avoiding all empty property liabilities and the need for security arrangements) or may chose to recover possession if the market affords better opportunities. Any continuing lease will revert to contractual terms at the end of the Rent Concession Period.

18. Class C2 landlords are the owners of non-performing stores trading at a loss or marginally but in locations which do not feature in the transformation plan and where the Group would wish to cease trading after the Christmas 2025 and New Year trading period. Such leases are to be compromised in the same way as Class C1 save that, since a closure date is certain, the landlord is to have an additional break right exercisable after 19 January 2026.

19. No compromised landlord is to be compelled to accept the amendments proposed in respect of their lease. Each landlord is to have a period of 30 days following the Effective Date in which to serve a 28 -day notice to vacate the relevant premises, thereby enabling that landlord to offer the premises on the open market.

20. The Business Rate creditors are required, under the restructuring plan, to release all arrears and to compromise in full any business rates arising in the period commencing 21 days after the Effective Date and ending on 31 March 2026.

21. The General Creditors are required under the restructuring plan to release all their claims in full.

22. In return for these compromises the unsecured creditors will receive out of a Plan Creditor Fund to be constituted by the Plan Company’s shareholder (i) a payment equal to 200% of their estimated return in an administration (to the significance of which I will come); and (ii) the right to participate in a Profit Share Fund. The Plan Company will pay into the Profit Share Fund a sum representing 25% of the excess over £55 million profit before interest and tax (“the Profit Gateway”) made by the business (i.e. the Group and the two other operating subsidiaries of the Plan Company) during the five years following the Effective Date. The fund so created will be distributed pro rata to the compromised creditors. The Profit Gateway has been set at such a level as ensures that the compromised creditors share in the profits before there is any reduction in the Group’s net indebtedness to Blue Coast as at the commencement of the plan and before there is any return to shareholders. In addition, each compromised Class B and Class C landlord will receive a sum equal to 3 weeks rent and property costs (representing the trade-out period in administration). Foundational issues

23. It is first necessary to establish what is most likely to happen if the restructuring is not put in place. The evidence of Anthony Smith (the Chief Financial Officer of the Plan Company) is that the board considers that the most likely scenario, should the plan not be sanctioned, would be the entry of the Plan Company and its subsidiaries into administration, followed by a sale of the stock, brand and intellectual property. Depending upon the liquidity runway available this could take place either by way of a pre-pack sale after a short period of trading to enable a marketing exercise to be undertaken (“high case”): or alternatively, if there is insufficient liquidity to sustain a marketing period, then such a sale upon commencement of administration, which, because the exercise would be undertaken under pressure, would produce a less favourable outcome (“low case”). In neither case is it likely that any leasehold units would be included in the asset sale because none has a premium value. The liquidity runway is estimated to be three weeks, during which time the cost of the continued occupation of the various leasehold units would be treated as an expense of the administration.

24. The Court is necessarily reliant upon the evidence of those to whom the management of the companies has been entrusted as to what the most likely alternative (“the relevant alternative”) to the sanctioning of the plan would be. However, the Court does not simply accept that evidence but subjects it to scrutiny in the light of what it perceives to be the commercial realities. In the instant case I see no reason to doubt it. Rather, I consider that it is supported by four commercial realities.

25. First, it is clear on the evidence that the Plan Company is forecast to exhaust its present cash resources in the week commencing 8th September, so that the liquidity runway from the sanction hearing date is short and some form of insolvency process is inevitable.

26. Second, although there is no evidence of attempts to tap the open market for funding for some process other than a short-term asset-realising administration, the nature of the asset base and the character of the trading performance are such that no source of such funding is likely to exist (as the dealings with Blue Coast itself tend to confirm).

27. Third, the expert report of Andrew Charters of Grant Thornton demonstrates that alternatives to an immediate sale of the stock, brand and IP in administration (he considered 10 possibilities) were either not viable or produced a lower potential return to creditors. One of the possibilities he considered was the inclusion within an asset sale of the most profitable leasehold units. This he regarded as not viable since (a) the most likely potential purchasers either (i) already had stores in the vicinity of these River Island units through which they could channel River Island products without adding to the cost base any additional retail premises or (ii) were themselves embarking upon a store reduction programme: and (b) assignment of leases of retail premises by companies in distress was operationally difficult since such occasions tended to be exploited by landlords. This possibility (and its downsides) was set out in paragraph 7 of the Practice Statement Letter dated 20 June 2025 and no one has challenged the opinion he offered.

28. Fourth, the expert report of David Purslow of Newmark analysed each of the business’s remaining 223 leasehold units and concluded that there is no leasehold premium value attributable to the Group’s leasehold estate. That is because upon examination of each unit the passing rent (which includes in some cases both the base rent and a turnover rent) is either at full market rate or in 79 cases is over-rented. This confirms the board’s assessment of what is realisable for value.

29. According to the evidence the estimated returns in the relevant alternative are as follows:- Category Low Case High Case Secured Lender 15.6p/£ 38.1p/£ All Classes of Landlord Nil 0.4p/£ from “prescribed part” plus 3 weeks rent and property costs at contract rate as an expense of the administration Business Rate Creditors Nil 0.4p/£ from “prescribed part” plus 3 weeks of business rates as an expense of the administration General Creditors Nil 0.4p/£ from “prescribed part” Shareholder Nil Nil

30. Having dealt with the principal foundational issue I can deal more shortly with the remainder. It is, secondly, necessary to address jurisdictional questions. Thompsell J on 11 July 2025 considered these in a judgment (“the Convening Judgment” at [2025] EWHC 2047 (Ch)) giving reasons for ordering the convening of plan meetings (“the Convening Order”). At paragraph [26] of the Convening Judgment he decided that the restructuring plan was an “arrangement” made between “a company” and some part of its “creditors” for the purpose of section 901A of the 2006 Act; and at paragraph [29] that the Plan Company had encountered financial difficulties which affected its ability to carry on business as a going concern. I therefore do not need to address these issues again.

31. It is necessary, thirdly, to consider the constitution of the plan meetings. Paragraphs [42]-[46] of the Convening Judgment contain the judge’s reasons for the constitution of the 10 classes of creditor to which I have referred above. Nothing that has occurred since makes it necessary to revisit that issue. In particular, none of the compromised landlords has contended that they should have been an Excluded Creditor or that they have been placed in the wrong class (matters which ought in any event to have been raised at the convening hearing). Nor have the consensual variations of contractual obligations reached with some creditors, which are in line with the proposals contained in the restructuring plan, raised any class or voting issues.

32. Fourth, I must consider whether there has been compliance with the statutory conditions and with the terms of the Convening Order. Without descending into detail I can say that, having considered the evidence, I am satisfied that all requisite conditions have been complied with.

33. Fifth, I must record the outcome of the plan meetings. These were held, as directed, on 1 August 2025. The votes in favour of adopting the restructuring plan were as follows:- Secured Creditor 100% Class A Landlords 27% Class B1 Landlords 100% Class B2 Landlords 73% Class B3 Landlords 57% Class B4 Landlords 100% Class C1 Landlords 57% Class C2 Landlords 28% Business Rate Creditors 79% General Creditors 100% Accordingly, the “assenting classes” were the Secured Creditor, the Class B1 and B4 Landlords, the Business Rate Creditors and the General Creditors; and the “dissenting classes” were the Class A, Class B2, Class B3, and Class C Landlords.

34. Lastly, I must consider whether the Court can rely upon the outcome of the plan meetings. This involves a consideration of three aspects. (i) I am satisfied that there was an appropriate communication of the material necessary to enable each creditor to take an informed decision upon the question at issue. Paragraph [54] of the Convening Judgment contains recommendations for the clarification of the Explanatory Statement in certain respects and these recommendations were acted upon. (ii) I am satisfied that the arrangements for each class meeting were satisfactory. Each meeting was held on a digital platform. According to the Chairman’s report, there were no technical difficulties and nothing to suggest an inability to participate on the part of any creditor. Only the Business Rate Creditors availed themselves of the opportunity to ask questions. There was no request at any class meeting for a private consultation between the creditors attending. The Chairman did not perceive any coercion or oppressive conduct or other irregularity at any of the meetings. (iii) I am satisfied that there was fair representation at the relevant class meetings. The Secured Creditor was a single-member class. Representation at Landlords’ meetings varied from 93% by value to 41% by value and from 67% by number to 33% by number. There was lower representation in relation to other classes. The number of Business Rates Creditors was 208, and the meeting was attended by only 9% by value and 4% by number. The number of General Creditors was 52, dominated by an intercompany debtor, resulting in a turnout of 99.9% by value but only 6% by number. In each case the class appears to have consisted principally of a large number of members each with a relatively small claim so that the absence of attendance is more likely attributable to indifference rather than to an inability to participate. I see no reason for suspecting that those who did attend expressed views that were unrepresentative of the class generally. Issues in relation to the assenting classes

35. It is well settled that where a class of creditors approves a scheme then Court accepts that those creditors are likely to be the best judges of their own commercial interests, but that the Court is not bound by their view and there remains a discretion to be exercised. Generally, the court will ask, as a cross-check on the possible influence of collateral interests, whether the plan is one of which an intelligent and honest class member might, having regard to their class interests, reasonably approve (“the rationality test”). In the instant case I unhesitatingly answer that in the affirmative.

36. First, I am satisfied that the restructuring plan is an alternative to a group-wide insolvency. The failure of the Group business means the immediate cessation of customer relationships and loss of future business. In the case of the landlords, the sale of the trading assets in administration will mean that they will be left with empty units in respect of which no rent or property costs are being paid; and will be faced with the choice of either forfeiting leases (facing the prospect of a void period, enhanced business rate charges, and security issues) or awaiting the conversion of the administration into a liquidation and the disclaimer of the leases. Having a tenant in place under the plan, albeit at a reduced rent, presents an attractive alternative. It avoids the immediate burden of an involuntarily vacant property but preserves the option to recover possession if the market provides better opportunities than the amended lease terms under the restructuring plan.

37. Second, the restructuring plan provides a greater return than that which is achievable in an administration. The Plan Creditor Fund provides an assured uplift and the Profit Share Fund provides the prospect of a greater return dependent upon the performance of the business. The objective of the transformation plan is to the reverse the historic decline in like-for-like sales and to achieve a forecast 1% per annum growth. But the actual growth might be higher over the contemplated five-year period. The greater return is shown in the following table:- Category of stakeholder Estimated Return in Relevant Alternative (low/high case) Estimated Return under RP after 5 years assuming 1% growth Estimated Return under RP after 5 years assuming 4% growth Secured Lender 15.6-38.1p/£ 28.8-46.8p/£ 87.1-100p/£ Class A Landlord • Nil-0.4p • 3 wks rent and property costs • 100p/£ rent and property costs • 0.8p/£ from Plan Creditor Fund • 100p/£ rent and property costs • 0.8p/£ from Plan Creditor Fund • Pro rata share in £5.4 million Profit Share Fund Class B1 Landlord • Nil-0.4p • 3 wks rent and property costs • 75p/£ rent during RCP and full contractual rent thereafter • 100p/£ property costs • 0.8p/£ from Plan Creditor Fund • 3 wks contractual rent and property costs • 75p/£ rent during RCP and full contractual rent thereafter • 100p/£ property costs • 0.8p/£ from Plan Creditor Fund • 3 wks contractual rent and property costs • Pro rata share in £5.4 million Profit Share Fund Class B2 Landlord • Nil-0.4p • 3 wks rent and property costs • 60p/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord] • 60/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord] Class B3 Landlord • Nil-0.4p • 3 wks rent and property costs • 50p/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord] • 50p/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord] Class B4 Landlord • Nil-0.4p • 3 wks rent and property costs • 25p/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord] • 25p/£ rent during RCP and full contractual rent thereafter • [As for Class B1 Landlord] Class C Landlords • Nil-0.4p • 3 wks rent and property costs • 0p/£ rent until termination • [As for Class B1 Landlord] • 0p/£ rent until termination • [As for Class B1 Landlord] Business Rate Creditors • 3 wks business rate payments • Nil-0.4p/£ • 3 weeks business rate payments • 0.8p/£ from Plan Creditor Fund • 3 weeks business rate payments • 0.8p/£ from Plan Creditor Fund • Pro rata share in £5.4 million Profit Share Fund General Creditors • Nil-0.4p/£ • 0.8p/£ from Plan Creditor Fund • 0.8p/£ from Plan Creditor Fund • Pro rata share in £5.4 million Profit Share Fund Shareholder • Nil Implied equity value of minus £332m to minus £248m Implied equity value of minus £63m to plus £113m

38. I therefore see no reason to differ from the opinion of the assenting classes. Issues relating to the dissenting classes

39. Because the restructuring plan has not been approved by all classes of creditor the question arises whether the Court should exercise its power to “cram down” the dissenting creditors. There are two threshold requirements.

40. First, section 901G(3) of the 2006 Act requires that no member of the dissenting class shall be any worse off under the restructuring plan and it would be in the relevant alternative. This is to be analysed primarily, but not exclusively, in terms of the anticipated return on their claim. In the instant case that test is satisfied in relation to each dissenting class. Their rental and property cost claims during the anticipated period of an administration are preserved. They receive 200% of their anticipated return in a “high case” relevant alternative. They receive that by way of payment out of the Plan Creditor Fund constituted by the Plan Company’s shareholder for the compromised creditors: and they do not have to wait until the end of the administration to receive that distribution. Landlords avoid having involuntary possession forced upon them, but remain able to recover it if they so desire.

41. Second, section 901G(5) of the 2006 Act requires that the restructuring plan be assented to by at least one class of creditor which would receive a payment or have a genuine economic interest in the relevant alternative. This test is also satisfied. The restructuring plan has been approved, in particular, by the Secured Creditor, and the Class B1 and B4 Landlords. The application of this test requires careful scrutiny to see the that the statutory condition has not been satisfied by the vote of an artificial class created with the object of it approving the plan and therefore providing the restructuring plan with the requisite anchor for the purposes of the section. In the instant case no such issue arises.

42. The satisfaction of those two threshold conditions opens up the exercise of the discretion to approve the restructuring plan notwithstanding its failure to secure the approval of all classes. The purpose of this discretion is to enable the Court to prevent any one class of creditor from exercising an unjustified right of veto: Re Petrofac [2025] EWCA Civ 821 at [131]. Guidelines as to the exercise of this discretion are developing on a case-by-case basis, powerful guidance being provided by the three recent Court of Appeal decisions in Re AGPS Bondco plc [2024] EWCA Civ 24, Re Thames Water Utilities Holdings Ltd [2025] EWCA Civ 475 and Petrofac (supra).

43. The principles I intend to apply are these:- (1) There must be a fair sharing of the burden of the restructuring plan amongst those whose rights are compromised and a fair allocation of its benefits (the value preserved or generated by the plan) to and between them. (2) The assenting classes will have made their own judgment upon that question, and the concern of the Court is to look at it from the perspective of the dissenting classes and to ask why the compromise approved by the assenting classes should be imposed upon them. (3) The burden lies upon the plan company to persuade the Court that there is a fair sharing of the burdens and of the benefits even if no objectors appear at the sanction hearing. (4) The starting point (but only the starting point) is the treatment of the dissenting class in the relevant alternative. (5) Where the relevant alternative is an insolvency process the initial expectation will be pari passu treatment of creditors within each insolvency class. (6) Differential treatment within an insolvency class is permissible if justified on proper grounds. (7) When considering whether the treatment of a class or any differential treatment within a class is “fair” the primary focus of the Court is upon their interests qua creditor. (8) When considering the sharing of the burdens and the benefits the Court is not confined to a consideration of the restructuring plan itself but is entitled to stand back and consider also the effect of the restructuring plan on those who are not parties to the compromises (such as creditors outside the scope of the plan or shareholders). (9) When considering the sharing of the burdens and the benefits the Court is entitled to take into account the source of the benefits (how the value is preserved or generated by the plan). (10) When assessing the burdens and benefits the court is concerned with the substance not the form: the provision of new money on terms more advantageous to the provider than would be required by a lender in the market is in reality a benefit conferred on the provider rather than a contribution to the cost of the plan. (11) The Court will have regard to the evolution of the restructuring plan and will seek to assess whether it is a genuine attempt to formulate a fair and reasonable solution to a critical problem or an attempt to impose arbitrary compromise terms upon creditors with a view to extracting advantage in a critical situation.

44. In the instant case no dissenting creditor has appeared to argue which of the foregoing principles is violated by the present restructuring plan: and the Plan Company, 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. So, I must undertake the analysis unaided. Having done so in my judgment this restructuring plan ought to be approved as a genuine attempt to bridge a funding gap whilst an operational restructuring is effected.

45. The dissenting classes are all unsecured creditors. Within the category of unsecured creditors there is differential treatment. All do better than in the relevant alternative, but the betterment is greater for some than for others. Landlords do relatively better than the Business Rate Creditors and the General Creditors: but both of those latter classes have approved the plan and do not complain that this is unfair treatment. There is differential treatment of different landlords, but this differential treatment derives from a carefully applied rational methodology. Those who have historically contributed significantly to the present financial predicament and prospectively have the least to contribute to the transformed business derive proportionately less benefit from the value preserved or generated by the adoption of the plan. Those who prospectively have more to contribute to the transformed business because of anticipated profitability or perceived strategic importance face a more limited compromise of their claims.

46. In this connection I was puzzled why the Class A (and for that matter Class B2 and Class B3) Landlords did not approve the plan whereas a significantly more impaired class (Class B4) did approve it and upon grounds which satisfy the rationality test. I think the answer is to be found in the presence in these dissenting classes of two multiple-site landlords who “block voted” against the plan in every class. One was Fraser Group and the other British Land.

47. In Class A (the least impaired group of landlords) the votes against the plan amounted to 41% by value, being £446,474 of which Frasers voted £330,449. In Class B2 (where 73% would have approved the plan) the votes against the plan amounted to 15% by value being £1.074 million of which Frasers voted £509,832. In class B3 the entirety of the vote against the plan was cast by Frasers. One can well understand why a rival high street clothing retailer with a notable skill in acquiring additional brands out of administration might prefer to see the Plan Company cease operations and go into administration: but it is not easy to see why, from the perspective of a pure landlord, that is the preferable alternative.

48. British Land was another multiple landlord, with 15 sites in the excluded estate and 7 sites within the scope of the restructuring plan (in Classes A, B1, B3 and C2). It has been in contact with the Plan Company since 20 June 2025 and, following correspondence from its solicitors received immediately after the plan meetings on the 1 August 2025, was invited to state its objections to the restructuring plan. It declined to do so. It is again not easy to see why, from the perspective of a landlord, it was preferable to risk the closure of the 15 stores on the excluded estate by voting against the proposals for dealing with the 7 in-scope stores.

49. The Plan Company has commissioned from PwC a Plan Benefits Report which sets out the percentage level of return that each class of Plan Creditor is anticipated to receive in respect of its contribution to the benefits preserved or generated by the plan. The Skeleton Argument of Mr Weaver KC and Mr Abraham contains the following table demonstrating the results of the exercise:- Category Benefits as proportion of contribution at Effective Date Benefits as proportion of contribution at Year 3 assuming 1% growth Secured Lender (23.4%) 74.1% Class A Landlord N/A 254.2% Class B1 Landlord 40.1% 113.0% Class B2 Landlord 25.3% 91.3% Class B3 Landlord 25.1% 60.5% Class B4 Landlord 23.6% 29.8% Class C1 Landlord 24.8% 4.3% Class C2 Landlord 115.1% 0.5% Landlord Aggregate 25.6% 46.5% Business Rate Creditors 5.8% 265.9% General Creditors 0.8% 0.8%

50. This table is prepared using nominal values and standard assumptions (e.g. that dilapidation claims equate to £15 per.sq.ft. across the estate). It is not weighted to reflect lease termination dates (so that early expiry dates – many compromised leases will expire within the Rent Concession Period – will be reflected in lower apparent returns). It does not seek to value the benefit to a landlord of continued occupation by a tenant and the avoidance of empty property costs. It does not value as a contribution the guarantee that the Secured Lender is providing to support the continuing Barclays facilities. It therefore provides no more than a very approximate guide to horizontal comparisons. But it does demonstrate (i) that the treatment of the dissenting classes is certainly not out of line with that of the assenting classes; (ii) that all Landlords are provided with a Day 1 return on their contribution; and (iii) that the Secured Creditor is making the most significant contribution in that it will not recover its existing and new loans even in 3 years. The table, of course, takes no account of the potential for participation in the Profit Share Fund, which is therefore an unstated benefit. Nor does it take into account the right of any landlord to recover possession if of the view that a better return is available in the market.

51. Taking a step back and looking outside the confines of the restructuring plan itself, there is no unfair allocation of benefit to those who are not plan creditors. As to the excluded creditors, there are sound commercial reasons for not including them within the scope of the plan. There are parties with whom for operational reasons an unbroken relationship on existing terms is essential to the implementation of the Transformation Plan; alternatively, parties with whom a new relationship on market terms has been negotiated reflecting the terms of the restructuring plan and in circumstances which do not call into question the results of any plan meeting.

52. As to the Plan Company’s shareholder, the equity value of the Plan Company will remain in negative territory unless by year 5 the business has achieved an annual growth rate of 4% and at that five year point the appropriate valuation multiple is around 5 (the present range is 4 to 6.5). That is the “break-even” point. Meanwhile the shareholder must constitute the Plan Creditors Fund on a non-recourse basis and dilute its returns by setting aside income for the Profit Share Fund. So the shareholder is making an immediate actual contribution to the cost of the restructuring plan in return for a potential benefit 5 years out on “high case” assumptions. There is no unfairness in that: and in any event the equity value derives to a significant degree to the generous rescue finance terms offered by Blue Coast in relation to the RCF.

53. In the result I was entirely satisfied that the restructuring plan ought to be approved. .