A brief survey of the primary types of voluntary and involuntary liquidation and reorganisation processes in Netherlands, including key requirements and procedures.
Tuesday, March 16, 2021
Re gategroup Guarantee Limited [2021] EWHC 304 (Ch) (
Re gategroup Guarantee Limited) and provides a view of its effects on the cross-border application of the Restructuring Plan (defined below) and the use of co-obligor structures in restructurings.
IN DEPTH
The Restructuring Plan
The UK restructuring plan was introduced by the Corporate Insolvency and Governance Act 2020 as a new Part 26A of the Companies Act 2006 (the
Restructuring Plan) and is substantially modelled on the existing UK scheme of arrangement under Part 26 of the Companies Act 2006 (the
Scheme). Restructuring Plans primarily differ from Schemes in the following respects:
A company may use Restructuring Plans where: (i) it has encountered, or is likely to encounter, financial difficulties that are affecting, or will or may affect, its ability to carry on business; and (ii) a compromise or arrangement is proposed between the company and its creditors and/or members (or an
Key Takeaways
The use of the UK restructuring plan (
Plan ) introduced last summer has been gathering pace with a handful of recent judgments seeing it used to implement cross-border restructurings instead of UK schemes of arrangement (
Schemes ).
In a significant recent judgment in respect of a Plan proposed by Gategroup
1, the High Court decided that Plans are insolvency proceedings falling outside the scope of the Lugano Convention.
2
Classifying Plans as insolvency proceedings is likely to complicate their use in Europe, and it is clear that, based on this decision, the Lugano Convention will not provide a post-Brexit route for Plans to be recognised in Europe.
The impact of a no deal Brexit on UK/EU cross
border insolvencies
Throughout the transition period the Recast Regulation has
continued to operate as between the UK and the remaining member
states.
The Withdrawal Agreement provides specifically in relation to
the Recast Regulation that: In the United Kingdom, as well as in the Member
States in situations involving the United Kingdom, the following
provisions shall apply as follows:
. (c) Regulation (EU) 2015/848 of the European Parliament
and of the Council shall apply to insolvency proceedings, and
actions referred to in Article 6(1) of that Regulation, provided
that the main proceedings were opened before the end of the