Global Restructuring Review Features Akin Gump-Moderated Panel on Recognition of UK Insolvency Procedures Post-Brexit
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In “IWIRC London/Europe: recognition of insolvency and restructuring procedures post-Brexit,” Global Restructuring Review reported on a panel organized by the International Women’s Insolvency and Restructuring Confederation that was moderated by Akin Gump financial restructuring counsel Caoimhe Kennedy and featured, among other panelists, Akin Gump restructuring partner Lois Deasey.
According to the article, panelists discussed post-Brexit recognition of the U.K.’s insolvency and restructuring procedures in the EU and examined, as possible routes for recognition, the UNCITRAL Model Law and the Lugano and Hague conventions, among other multilateral agreements and frameworks.
Among Ms. Deasey’s insights:
- UNCITRAL Model Law: A possible path to recognition for U.K. insolvency process in the EU would be the use of the Model Law, which the U.K. has adopted. However, only four EU countries have adopted it. An insolvency practitioner in the U.K. could make an application and seek recognition in those four jurisdictions. Though the timing and processes would vary among the countries, this is, at a minimum, a “tried and tested way” to provide for recognition and a degree of cooperation and coordination between U.K. and local courts.
- Lugano/Hague conventions: The U.K. is currently not a signatory to Lugano, although it has applied to accede, which, were it successful, would enable mutual recognition, but with certain limitations. Additionally, Lugano is not as effective at reducing the chance of parallel proceedings as the EU Insolvency Regulation was. The recent Gategroup decision in the English High Court has, at least for the moment, “extinguished the U.K.’s hope of using Lugano to find recognition of restructuring plans.” On the Hague Convention, although both the U.K. and EU are signatories, it has the same bankruptcy carve-out as Lugano and, thus, may not apply to restructuring plans post-Gategroup.
- Recognition of EU restructuring proceedings in the U.K.: Recognition, post-Brexit, would not be as powerful as under the Insolvency Regulation, as recognition would not be automatic or, potentially, as broad and would involve more judicial discretion. Potential remaining paths include the U.K.’s adoption of the UNCITRAL Model Law via the 2006 Cross-Border Insolvency Regulations. Another option would be recognition through Section 426 of the Insolvency Act, under which, under which an Irish procedure can get wide-ranging recognition in the U.K. None of these options require reciprocity, so there is a “fairly clear path” to recognition. However, there is limited case law for the use of treaties for recognition, as, until now, the U.K. relied on the Insolvency Regulation.
To read the full article, click here.
