While the TCA seeks to avoid a so-called “no-deal” Brexit, it does not appear to promote a scenario whereby reciprocal automatic recognition and cooperation between the UK and the EU in relation to cross-border restructuring and insolvency (R&I) proceedings would continue to have effect after December 31, 2020. Consequently, key pieces of EU legislation will no longer be applicable to the UK and alternative legal mechanisms for recognizing cross-border R&I proceedings will gain importance.
Although alternative legal mechanisms will need to be relied on, the advantages of English R&I processes will endure post-Brexit. For example, the tried and tested English scheme of arrangement has been dubbed one of its greatest exports and has been used to restructure the debts of both English and foreign corporations for a number of years with great success. Building on this is the recent introduction of the flexible “restructuring plan” implemented by the Corporate Insolvency and Governance Act 2020 that will help to maintain the attractiveness of the UK as a forum for cross-border R&I processes. Crucially, the English R&I framework has withstood the test of time and benefits from well-established principles entrenched in commercially-minded and efficient English courts, providing a certain amount of predictability for all stakeholders involved in the restructuring.
Sidley Austin LLP provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from professional advisers.
Attorney Advertising—Sidley Austin LLP, One South Dearborn, Chicago, IL 60603. +1 312 853 7000. Sidley and Sidley Austin refer to Sidley Austin LLP and affiliated partnerships, as explained at www.sidley.com/disclaimer.
© Sidley Austin LLP