Insolvency and Restructuring Alert: Prezzo Investco Ltd

The application before Richard Smith J in Re Prezzo Investco Ltd (Re Companies Act 2006) [2023] EWHC 1679 (Ch) was for sanction of a restructuring plan between the company and certain of its creditors under ss 901F and 901G of Part 26A Companies Act 2006.

The company had a single, wholly-owned subsidiary, Prezzo Trading Limited, which operated (and continues to operate) a chain of Italian restaurants under the Prezzo brand. It got into serious financial difficulties, initially as a result of the pandemic, later because of the effect of price increases. The company attempted to deal with its difficulties by means of a CVA, which resulted in the sites operated by the trading business being reduced from 300 to 209 and the closure of three other restaurant brands then operated by it. Following the CVA, a further 23 sites were closed, reducing the operating restaurants to 186. However, a loss of some £4.5m in 2022 led to further cuts and the proposal of a restructuring plan. The only alternative, it was said, was administration of the company and its trading arm. That, it was said, would leave creditors and others affected materially worse off than under they would be under the plan; the plan would allow the Prezzo business to continue to trade as a going concern, albeit from a much reduced number of outlets, but on a financially sustainable footing.