Argo Blockchain plc: Key Insights from the First Post Petrofac Restructuring Plan Decision

Argo Blockchain plc’s (Argo) restructuring plan represents a significant development in the UK’s restructuring regime. Not only does it involve the UK's first restructuring plan involving a crypto‑mining business, but it is also the first major post‑Petrofac[1] decision addressing how out of the money creditors should be treated. 

Summary of the Argo Plan 

The plan was designed to facilitate a rescue of Argo by Growler Mining, avoiding an impending administration and, critically, safeguarding its NASDAQ listing. The plan proposed to reshape Argo’s shareholding, leaving Growler with 87.5%, noteholders with 10%, and existing shareholders with 2.5%, supported by a capital reorganisation aimed squarely at restoring compliance with NASDAQ’s bid‑price requirements. 

While the plan required Argo to delist from the LSE, the impact on shareholders was softened through access to a matched‑bargain facility and the ongoing ability to convert shares into NASDAQ‑listed American Depositary Shares (ADSs). Taken together, the structure was carefully calibrated to keep Argo trading as a going concern, and on a viable public market platform.

Turnout at the class meetings was strikingly low: just 1.6% of noteholders and 3.2% of shareholders cast a vote on the plan. While a lack of engagement is not, in and of itself, fatal to a UK restructuring plan, the Court scrutinised whether retail investors had been given a genuine opportunity to participate. That concern was addressed by an independently appointed retail advocate, who confirmed that Argo’s communications had been clear, comprehensive and widely disseminated. In the Court’s view, the low turnout was therefore more likely to reflect investor apathy, rather than any structural or informational barrier to engagement.

The noteholder meeting presented a more fundamental difficulty. Not a single noteholder attended either in person or virtually, with the Chair the only individual present, relying solely on proxy votes. The meeting therefore fell foul of the requirement for two people to be present to be valid (as determined by the Court in Re Altitude Scaffolding [2006] EWHC 140 Ch). The Noteholders had to be treated as a dissenting class, which in turn triggered the more stringent section 901G cram-down fairness test, despite the judge agreeing that treating an approving class as a dissenting class, purely as a result of meeting formalities, was "verging on Kafka-Esque".

The Court's decision 

Companies must demonstrate to the Court that the benefits of the restructuring plan have been allocated fairly across all classes of plan creditor, proportionate to their contributions toward creating or preserving those benefits. This fairness principle had been the focus of recent restructuring plan case law and continues to be a focus of the judiciary. 

The Court agreed that the correct legal approach was to treat the noteholders as a dissenting class, and the judge proceeded to apply the cross-class cram-down test. In doing so, the judge concluded that the noteholders would be no worse off under the restructuring plan than in the relevant alternative scenario of an administration and wind‑down, in which recoveries were estimated to be less than 1 per cent.

A central issue for the Court was whether the proposed allocation of value between Growler, the noteholders, and the shareholders was fair. Relying on expert evidence, Mr Justice Hildyard accepted that Growler was providing the overwhelming majority of the restructuring value, through a combination of new capital, asset transfers, and debt write‑offs. He further accepted that both noteholders and shareholders were receiving equity with a value exceeding what their economic position would have entitled them to in an insolvency. 

The Court rejected arguments that shareholders should be eliminated entirely, observing that the additional equity allocated to junior stakeholders was, in effect, a “gift” from Growler, and did not leave creditors worse off when compared with the relevant alternative.

The judgment also considered objections raised on behalf of retail investors by the retail advocate. These included concerns about low voter turnout, the impact of delisting from the London Stock Exchange on liquidity, and comparisons with the absolute priority principles applied in US Chapter 11 proceedings. The Court found that retail investors had been adequately informed, that alternative trading mechanisms remained available through Nasdaq ADSs or matched bargain facilities, and that Part 26A of the Companies Act does not impose US‑style priority rules.

While ultimately granting sanction, Mr Justice Hildyard issued a pointed warning about the increasingly compressed timetables in restructuring plan cases. He cautioned that the Court’s willingness to act with urgency should not be assumed, and that parties should not take judicial flexibility for granted. The Court's concerns over the "breathless" timetable imposed to conduct the Argo plan, albeit as a result of the need to satisfy NASDAQ deadlines, are mirrored in the Court's Practice Statement on schemes and restructuring plans, which came into effect from the start of 2026. 

Summary 

There were concerns that after the decisions in Adler, Petrofac and Thames Water, restructuring plans would be considered too challenging and complex, rendering them essentially inaccessible to most businesses, even at an SME level. That was compounded by the decision in Petrofac, which brought the rights of the "out of the money" creditors to the forefront. This was so even in circumstances where they were due to receive nothing under the relevant alternative to the proposed restructuring plan. 

The decision in Argo provides some valuable guidance from the Court and highlights the usefulness of the restructuring plan process in certain circumstances, even if the process is still out of the reach of a significant proportion of UK businesses.