Our Restructuring, Turnaround and Insolvency team has published a quick guide to the implications of Brexit for cross-border insolvencies, given the absence from the EU-UK Trade and Cooperation Agreement of any provision for continued recognition of, or co-operation in, insolvency and restructuring proceedings. The briefing examines in particular how:
- Insolvency practitioners, debtors and creditors in both the UK and the EU will need to modify their approach where a debtor and its insolvency proceedings have a cross-border element.
- Recognition of English insolvency proceedings in the EU will now depend on the local law of each member state. Only four member states have adopted the UNCITRAL Model Law, permitting cross-border insolvency recognition upon application to the member state’s courts. Recognition is not automatic.
- For insolvency proceedings originating in a member state, recognition in England will be possible under the UNCITRAL Model Law.
- Schemes of arrangement were given effect in the EU via civil jurisdiction rules, not insolvency jurisdiction rules. These have now been lost, though schemes are likely to retain effectiveness at least in relation to English law debts or debts arising under agreements containing a mutual, exclusive jurisdiction clause in favour of England.
- As to restructuring plans, this is a live issue before the English courts, but may also be impacted by local laws in the EU.
For more information, click here to access the briefing.