In distressed situations, commercial negotiations will often go down to the wire. Whilst proposals for restructurings may be approved in principle among stakeholders, their implementation may rely to a greater or lesser degree on future agreement among the relevant parties. The recent decision of Mr Justice Trower in Re Smile Telecoms Holdings Ltd provides guidance on how those factors weigh on the sanction of Restructuring Plans in the UK’s new insolvency regime.

The recent Gategroup decision has put a focus on recognition of UK insolvency tools, as the industry grapples with uncertainties as to EU-wide treatment as an outsider. We consider whether it matters that there may not be any uniform recognition treatment for Restructuring Plans, and whether that offers parties opportunity as well as uncertainty.

1. Overview

On 20 May 2020, the Corporate Insolvency and Governance Bill (the “Bill”) was introduced to the UK Parliament. The Bill is expected to be fast-tracked through Parliament and be enacted as early as June 2020.

The Bill deals with both temporary measures in response to the immediate effects of the COVID-19 pandemic, and major reforms to the insolvency regime. It represents one of the most debtor-friendly developments in recent times.