RX 101: Use of English Restructuring Tools By Overseas Companies
Fri May 26, 2023 2:58 pm Covenants Analysis

Following the U.K.’s departure from the EU in 2020, distressed European companies continue to make use of English restructuring tools such as the scheme of arrangement and Part 26A restructuring plan.

The English courts have overseen the expansion of scheme jurisdiction in the past 20 years, typically finding the development as an example of “healthy” or “good forum shopping” and since the introduction of the new Part 26A restructuring plan in 2020, this approach has been continued. Most recently, German real estate group Adler chose to restructure its debt using an English restructuring plan rather than make use of its new German equivalent, the STaRUG.

This installment of the RX 101 series reviews the relevant case law and sets out key considerations for offshore companies and their creditors seeking to use English law schemes of arrangement and Part 26A restructuring plans to compromise their liabilities.

Since the new restructuring plan was explicitly designed to build on existing scheme case law, all references to “schemes” in this article incorporate both schemes of arrangement and Part 26A restructuring plans.

Read the full article.

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