IMO clears up MyTravel issue

Author: | Published: 1 Sep 2009

The recent English High Court judgment relating to the restructuring of IMO Car Wash is a landmark for the industry. Justice Mann sanctioned schemes of arrangement for companies in the IMO group, the world's largest car wash company, clarifying in the process certain of the issues surrounding valuation that had been left open in the earlier MyTravel case. In particular, it is now clear that a "going concern" valuation rather than a "break up/liquidation" valuation is appropriate for assessing the respective interests of competing creditors in disputed restructurings of this type. However, there remains doubt as to how a going concern valuation is to be assessed as each case will turn on its specific facts.

One point that will attract the interest of the industry is the willingness of the High Court to consider the specific details of a proposed scheme of arrangement in isolation of the wider restructuring...