This update explains the key changes in cross-border insolvency proceedings if the UK leaves the EU without a deal on 31 October 2019 (or at a later date). Importantly, a no-deal exit will impact how and where such insolvency proceedings can be raised in a post-Brexit future.

A bit of background

While the UK is still an EU Member State, EU Regulations provide a clear framework for conducting cross-border insolvency proceedings. The EU Insolvency Regulations (the 2000 Insolvency Regulation and the 2015 Recast Insolvency Regulation) include provisions which:

On 14 October 2019, the European Commission (“Commission”) approved the German rescue aid to charter airline Condor under the EU State Aid rules.

Condor is going through a difficult financial situation following the entry into liquidation of the Thomas Cook Group, its parent company. The charter airline is currently facing an acute liquidity shortage but also a loss of important claims against other member companies that it will not be able to collect.

On June 26, 2019, the European Parliament and the Council of the European Union published a new EU Restructuring Directive on preventive restructuring frameworks, discharge of debt and disqualifications, and measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (“Directive”).

This is an extraordinary achievement given the existing differences in restructuring regimes across EU Member States.

We consider one case illustrating the efficiency of international insolvency proceedings commenced in Ireland, improvements to the efficiency of the appellate courts and one imminent legislative change, which will impose an administrative burden on the holders of security over book debts.

Ireland as an efficient venue for international insolvency

What is the preventive restructuring framework and what are its key features?

Where there is a likelihood of insolvency (but importantly where the debtor is not yet insolvent as defined by national law), Member States must provide debtors with access to a preventive restructuring framework that enables them to restructure, with a view to preventing insolvency and ensuring their viability.

Four months on from our inaugural newsletter – and where do we start??

Theresa out, Boris in; champagne super overs at Lords; hottest bank holiday on record; largest ever peacetime repatriation (of holidaymakers); Parliament unlawfully prorogued; Brexit on hold (again); and a general election two weeks before Christmas. It’s been anything but dull.

The team have been equally as active in the same period, having seen a significant influx of new work. Amongst the main highlights were:

Bloomberg reported last month that the Madoff bankruptcy has one more big case to go, chasing USD3.2b held by foreign banks (see our related story above). Mr Picard, the bankruptcy trustee, has reportedly recovered over USD14b of the USD17.5b in losses arising from Madoff's Ponzi scheme.

Foreword Head of Real Estate Disputes Mathew Ditchburn considers what 2020 may have "in store". Five minutes with: Hebe Morgan We chat to real estate associate Hebe Morgan who is currently on secondment at M&G Real Estate.

CVA Special: Mathew Ditchburn reports

In this week’s update: The court finds that selfdealing by a director and a share buyback were void, the PERG report on compliance with the Walker Guidelines, the BVCA and EY review private equity portfolio company performance, the QCA reports on AIM company corporate governance and a few other items. 

Court confirms self-dealing by director was void

There are a range of potential outcomes to the current Brexit negotiations. What would the impact on corporate recovery and insolvency be of a no-deal Brexit? It is important for all stakeholders, including businesses, lenders and investors to be aware of the difficulties that will arise in the event of a no-deal Brexit.

Key points if no-deal Brexit happens