On 11 February 2021, the English High Court confirmed in gategroup Guarantee Limited that restructuring plans are insolvency proceedings so are not covered by the Lugano Convention.
One of the debt instruments subject to the gategroup restructuring plan contains an exclusive Swiss court jurisdiction clause. Under the Lugano Convention, proceedings relating to "civil and commercial matters" must generally be brought in the jurisdiction benefitting from the exclusive jurisdiction clause.
In the final part of our predictions for 2021 for the UK insolvency market we look at pensions, the National Security and Investment Bill and cross border matters.
Although the Trade and Cooperation Agreement (TCA) arrived in time to prevent a wholesale “no deal Brexit,” issues of cross-border cooperation and recognition in relation to insolvency and restructuring proceedings were not included in the agreement.
The team’s spirits have soared this week; not only have we been able to book a garden table at our favourite restaurant for 13th April, it looks as if we might not need to take the 1CL umbrellas with us. Yes, it’s Spring, and the new season brings renewed vigour and optimism to the gang.
Ein Geschäftskonzept, von dem auch die Geschäftspartner sind, obwohl die Zahlungsunfähigkeit droht? Das Gesetz über den Stabilisierungs- und Restrukturierungsrahmen für Unternehmen (Sta-RUG) unterstützt Unternehmen dabei, ohne Insolvenz durch die Krise zu kommen.
Sanierung ohne Insolvenz: Worum geht es?
Mit dem neuen Restrukturierungsrahmen stehen Unternehmen seit Januar 2021 erweiterte finanzwirtschaftliche Sanierungsinstrumente außerhalb der Insolvenz zur Verfügung.
From 31 December 2020, the European Regulation on Insolvency Proceedings (the “EIR”) ceased to apply in the UK. As a result:
The economic impact of the COVID-19 pandemic led to a wave of creditor schemes of arrangement ("schemes") and restructuring plans ("RPs") in the second half of 2020, which shows no sign of abating in 2021. For the uninitiated, the scheme (a long-established tool) and the newer RP process are court led UK restructuring options that a company can use to bind a minority of creditors into a restructuring. An RP can also be used to "cram down" an entire dissenting creditor class into a deal where certain conditions are met.
The new Part 26A Companies Act Restructuring Plan procedure, dubbed the “Super Scheme”, (summarised here) was gathering pace in the English courts since its introduction in June last year. Last week’s judgment in gategroup presents a potential speed bump in terms of its implementation as the restructuring tool of choice in European cross-border restructurings.
The UK left the European Union (EU) on 31 January 2020 and the transition period in which EU rules continued to apply ended on 31 December 2020. As such, for insolvency proceedings opened in England after 31 December 2020, they will no longer benefit from automatic recognition in an EU member state.
Therefore, insolvency practitioners (IP) of a company with multijurisdictional operations or assets will be required to make an application in the relevant EU jurisdiction to have proceedings recognised in that jurisdiction.
Prior to 1st January, 2021, the cross-border recognition and enforcement of insolvency proceedings and judgements between the European Union ("EU") and the United Kingdom ("UK") was largely consolidated within the framework of the European Insolvency (Recast) Regulation (the "EIR") which generally attributed automatic recognition to such proceedings and/or judgements. Following the end of the Brexit transitional period on the 31st December 2020, the EIR no longer applies to the UK.