The UK's withdrawal from the European Union has created uncertainty around insolvency law. Let's look at how things have changed in the wake of Brexit, and what that means for current and future German insolvency proceedings.
What is the state of play post-transition period?
Summary
Introduction
The United Kingdom formally left the European Union (EU) at 11pm on the 31 January 2020 (Exit Day) and entered into a period of transition. This transition period largely maintained the “status quo” with regards to restructuring and insolvency law and practice, primarily due to the UK having secured ratification of the withdrawal agreement. This made the arrangements between the UK and the EU fully reciprocal post-Exit Day and avoided the no-deal “cliff edge” Brexit, which many had initially feared.
January 2021
BUSINESS REORGANIZATION & RESTRUCTURING YEAR IN REVIEW
In this publication, we take a look back at some notable restructuring transactions of 2020 and identify key legal issues and trends that will be relevant in 2021 and beyond.
Contents
3 UNITED KINGDOM
Recapitalisation of the Lecta Group
5 UNITED STATES
Debt Restructuring of Ligado Networks
7 UNITED STATES
Pre-Packaged Restructuring of Northwest Hardwoods Inc.
8 FRANCE
Air France-KLM Group's 7 Billion Aid
10 ITALY
Recognition of UK insolvencies in Europe after Brexit[1] is navigating uncertain waters. Following the completion of Brexit, the UK has left parts of the EU's private international law realm, including the application of Regulation (EC) 1346/2000 on Insolvency proceedings (the EU Insolvency Regulation). Therefore, since January this year, any reciprocal statutory cooperation in insolvency law matters between the UK and the EU has ceased.
How will Brexit affect cross-border bankruptcy and restructuring proceedings involving the UK? Will judgments issued by an insolvency court in the UK still be recognised in Poland?
The United Kingdom ceased to be a member of the European Union from 1 February 2020, and the Brexit transition period ended on 31 December 2020. This means that from 1 January 2021, EU law no longer applies to the UK.
While the recent Brexit trade deal contains various provisions for the conduct of trade in the post-Brexit era, it does not provide clarification for new cross-border insolvency proceedings involving the United Kingdom.
However, the Withdrawal Agreement which came into force on 1 February 2020 and established the terms of the UK's withdrawal from the European Union, does provide some comfort for insolvency practitioners, but only where insolvency proceedings were opened prior to the end of the Brexit transition period.
Before we kick things off, all of the Business Support and Insolvency Team here at Boyes Turner would like to wish all of you a very Happy New Year.
There were big changes in 2020 in the world of restructuring and insolvency legislation with the introduction of two new restructuring tools: the Moratorium and the Restructuring Plan, as well as the reintroduction of Crown preference.