In our recent Alert, we share with you our thoughts on the recent Gategroup decision, in which Mr Justice Zacaroli ruled that the Part 26A restructuring plan, which was introduced in England & Wales in June 2020 as part of the Corporate Insolvency and Governance Act, is to be considered an insolvency proceeding.
This will have important implications for the recognition of Part 26A restructuring plans in the cross-border context, especially in the European Union.
Notwithstanding this development, we expect that both schemes and Part 26A plans will remain attractive tools for companies looking to restructure.
Assuming that the decision in Gategroup is upheld in future Plan judgments, the Plan must now be considered as an insolvency tool. In consequence, the Lugano Convention and the Hague Convention (which operates on similar principles to Lugano and to which the UK is already a party) will not apply to Plans. Instead, companies will have to rely on alternate bases for recognition, including Rome I or the private international law of the relevant jurisdiction...
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