In an address last week to the Insolvency Lawyers Association, Sir Geoffrey Vos,

the new Chancellor of the High Court, looked at the future for Insolvency and Business Litigation in London, especially after Brexit.

As the dust begins to settle after the EU referendum and the potential ramifications of Brexit continue to be digested, we examine the potential impact of Brexit on the UK cross-border restructuring and insolvency regime and its consequences for the UK’s reputation as a leading creditor-friendly restructuring jurisdiction.

The EU referendum outcome - to "Brexit" has divided the country. Whilst supporters of both the "Remain" and "Leave" campaigns continue to speculate on what might have happened had the result been different, or what will happen if, as or when Article 50 of the Lisbon Treaty is invoked, the only apparent certainty is that these are uncertain times for the UK. Unprecedented, uncertain times.

We are currently still in a lot of unknown territory; so how will our exit from the EU affect Debts here in the UK, in Europe and in other countries?

Once the UK finalises the exit from the EU, any debts someone may have in the EU will fall into the category of similar non-EU debts in other countries, such as the United States. Whilst you can include those debts in a UK bankruptcy you are only afforded the protection from them in the UK. 

At first glance, it seems that cross-border insolvencies between the UK and EU are likely to become more time-consuming, complex and expensive post-Brexit. However, the situation may not be as dire as it first appears due to the existence of alternative legislation and the exemptions to the EU legislation. As with other areas of law, when it comes to insolvencies much will depend on what steps are taken to maintain the current arrangements with the EU or whether they fall away altogether.

This article was first published in Getting the Deal Through - Ship Finance: Updates and Trends and is reproduced with permission.

The terms of the UK’s withdrawal from the EU will inevitably dictate the extent to which Brexit impacts upon financial agreements. As this stage, it is important to consider the clauses which may have to be reviewed.

The process of Brexit will take years, and the implications for our clients' businesses will unfold over time. Our MoFo Brexit Task Force is coordinating Brexit-related legal analysis across all of our offices, and working with clients on key concerns and issues, now and in the coming weeks and months. We will also continue to provide MoFo Brexit Briefings on a range of key issues. We are here to support you in any and every way that we can.

Go West

Cross-border insolvency proceedings involving the UK

The question of which law is applicable to cross-border insolvency proceedings within the EU and which court has jurisdiction over the opening, monitoring or conducting of the insolvency proceedings, is regulated by Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings (Insolvency Regulation) that is directly applicable in all EU member states, with the exception of Denmark.

For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.

Recent Developments

Earlier this year it was announced that the UK’s Financial Assistance Scheme (“FAS”) would close to applications from 1 September 2016.

This does not affect pension plans that are currently progressing through the notification and qualification process or pension plans that have already qualified for assistance. However, any qualifying pension plans that have not yet started the process need to move quickly as they now have less than a month to make a notification to the FAS.