Foreword: Restructuring & Insolvency

Insolvency and restructuring procedures have become quasi-commodities. There may be benefits to a debtor in using a process in a jurisdiction where that debtor is not domiciled (and may have no prior connection) and there are benefits to jurisdictions welcoming foreign debtors to use their procedures, creating economic benefits for lawyers, office holders and financial advisers.

Forum shopping can be positive, designed to take advantage of procedures available abroad which benefit the debtor’s creditors through their flexibility, predictability, efficiency or speed. Equally, the (generally qualified) freedom to seek to use a foreign procedure is open to abuse — as the UK Bankruptcy Court experienced when large numbers of German doctors and dentists sought to present debtor’s petitions in this jurisdiction, seeking to achieve their discharge from bankruptcy much sooner than was available in Germany. Some did so legitimately, moving their centre of main interests to the UK on a permanent basis. Others did not.

Political developments (Brexit being an obvious example), and the enactment of new restructuring tools (such as the German Corporate Stabilisation and Restructuring Act (StaRUG) and the Dutch Scheme (WHOA)), keep us on our toes and make it essential for advisers constantly to survey what is available elsewhere and how we can improve the tools available to us to compete.

The pace of change is rapid. Ten years ago, the UK Scheme of Arrangement did battle with the U.S. Chapter 11 for supremacy in restructuring. Whilst they remain key restructuring tools, the list of alternatives, three of them mentioned above, grows and complex, high-value schemes of arrangement have been sanctioned by courts in Hong Kong, Ireland, the Cayman Islands, Bermuda and elsewhere.

Even as I type this foreword, the consultation process on practice and procedure for the UK Part 26A Restructuring Plan is in full swing. The Restructuring Plan is only five years old and those of us who practise in this area are determined to see it continue to thrive.

Equally, The Cross-Border Insolvency Regulations 2006 have added to the ability of foreign liquidators to seek recognition in the UK of their appointment and of the foreign proceeding they are responsible for, together with affording them access to a number of important remedies available to domestic liquidators, as well as a moratorium.  That builds substantially on what was already available under the common law and statute, including under section 426 of the Insolvency Act, itself a powerful tool by which judicial assistance can be sought by liquidators but only those holding office in certain jurisdictions.

This Global Legal Post Law Over Borders Restructuring & Insolvency Guide, featuring contributions from leading experts in 17 different jurisdictions, will prove to be an invaluable source of information as to what can be done where. It is of use to debtors, advisers and policy makers alike, containing both practical and technical guidance in an easily digestible form.