RESTRUCTURING & INSOLVENCY - How Brexit Redefined the UK’s Role in Cross-Border Restructuring

Naba Mahmood
Nov 17, 2025
9 min read

Updated: Nov 27, 2025

Introduction

Brexit abruptly stripped the United Kingdom’s restructuring framework/model of its most valuable asset: automatic recognition across Europe, turning it from a predictable default into an experimental lab. London’s judicial system, capital markets, and the widespread use of English law for international debt instruments once made the UK a default forum for complex restructurings. Brexit, however, has disrupted this position. The loss of EU recognition frameworks has forced companies and practitioners to craft customised UK schemes of arrangement and liability management exercises (LMEs), or, in some cases, to sidestep London entirely. In this article, I examine how Brexit has reshaped cross-border restructuring. I will first examine the collapse of EU recognition frameworks, then analyse case law and debtor strategies post-Brexit, compare alternative EU jurisdictions, and evaluate Sino-Ocean as a test case for the UK’s innovative but less certain role.

The End of EU Cross-Border Regimes

Before Brexit, the UK’s restructuring toolkit operated within the seamless framework of EU law. Two regimes were central. Under the EU Insolvency Regulation, insolvency proceedings opened in one member state were automatically recognised across the union, providing uniformity and speed. Complementing this, the Brussels I Regulation streamlined recognition and enforcement of UK insolvency and restructuring judgments across member states. A UK court’s approval of a scheme or a plan was typically enforceable throughout the EU without further litigation. Together, these instruments gave UK practitioners confidence that a court-approved plan in London would bind creditors across Europe without the need for costly parallel proceedings.

This underpinned landmark restructuring. The Spanish gaming group Codere successfully used an English scheme in 2013 to restructure €1.1 billion of debt, with recognition secured in Spain under Brussels I. Likewise, Metinvest, the Ukrainian steelmaker, relied on a London scheme in 2016 to compromise obligations owed to creditors scattered across the EU, again relying on the automatic enforceability of English judgments. Companies like these chose English law not only because of its recognition advantages, but also because of its substantive flexibility. Under British law, a restructuring scheme can be approved by a simple majority in terms of both value and number of creditors, rather than requiring unanimity, as is the case under many continental systems. English courts also offered predictable, creditor-friendly jurisprudence and a reputation for commercial pragmatism, allowing debtors to negotiate complex capital structures efficiently. These features, procedural certainty and substantive flexibility, solidified London’s reputation as the premier forum for complex multinational restructurings. Pre-Brexit examples like Codere and Metinvest illustrate how London’s dominance was built on recognition certainty, a baseline that no longer exists.

Brexit ended this automatic flow of recognition. The UK no longer benefits from Brussels I or the Insolvency Regulation, meaning recognition now depends on the private international law rules of each EU member state. Some jurisdictions, like Spain, are more receptive; others, such as Germany, apply stricter tests. The result is a patchwork of uncertainty where once there was uniformity, eroding the UK’s ability to act as a guaranteed one-stop forum for pan-European restructurings.

For corporations, this means higher transaction costs, longer negotiations, and potential fragmentation of creditor classes. Creditors may demand higher yields or collateral when lending under English law, while debtors may pursue alternative venues with more predictable enforcement.

Recognition and Enforcement Challenges Post-Brexit

The post-Brexit environment has exposed UK restructuring tools to uneven treatment in EU courts. Without the umbrella of Brussels I and the Insolvency Regulation, recognition now depends on the private international law rules of each member state. The result has been inconsistent, with some jurisdictions more receptive than others.

The 2024 Aggregate case in Frankfurt starkly illustrated this problem. The German court declined to recognise aspects of an English restructuring plan that sought to compromise bondholder claims governed by German law. Its reasoning rested on principles of creditor protection embedded in German law and the absence of an EU-wide obligation to defer to UK judgments. Where once recognition would have been automatic, it must now be fought for on a case-by-case basis, creating both uncertainty and delay.

Alternative mechanisms provide only partial relief. The UK is a party to the 2005 Hague Choice of Court Convention, but this only assists where parties have exclusive jurisdiction clauses. The 2019 Hague Judgments Convention, not yet ratified by the UK, could offer incremental improvements, but its carve-outs mean it cannot replicate Brussels I or the Insolvency Regulation. National private international law rules offer occasional routes to enforcement, but outcomes vary, and debtors cannot rely on them to deliver uniformity across creditor classes.

For corporations, the consequences are material. Restructuring timelines are longer, as companies must seek parallel proceedings in multiple jurisdictions. Transaction costs rise, sometimes substantially, as lawyers coordinate across courts. Creditors may demand higher yields or security when lending under English law, pricing in enforcement risk. In turn, debtors are incentivised to consider alternative venues, such as Ireland, the Netherlands, or the US, where recognition is more predictable.

The cumulative effect is a fragmentation of creditor classes and a weakening of London’s once unrivalled position as a “one-stop shop” for cross-border restructurings.

Patterns in Recent Restructurings

The uneven recognition landscape is already shaping debtor behaviour. A survey of recent transactions shows that UK processes are still being used, but rarely in isolation. They are increasingly paired with jurisdiction “engineering” or parallel proceedings to secure cross-border effectiveness.

Debtor Group	Jurisdiction	UK Process	Jurisdiction “engineered”?	Sanction Date
Adler	Germany/Luxembourg	Restructuring plan	✓	April 2023
Atento	Latin America/Lux	Restructuring plan	✓	November 2023
China Fishery Group	Peru/Hong Kong	Restructuring plan, with parallel U.S Chapter 11 proceedings of the Singaporean parent	✓	September 2023
Cimolai	Italy	Restructuring plan, with parallel Italian concordato preventivo	X	August 2023
Hong Kong Airlines	Hong Kong	Restructuring plan, with a parallel Hong Kong scheme	X	December 2023
Lowen Play	Germany/Netherlands	Scheme of arrangement	✓	May 2022
SGB-Smit	Germany	Restructuring plan	X	June 2023
Smile Telecoms	Mauritius/various African jurisdictions	Restructuring plan	✓	March 2021 and March 2022
Veon	Netherlands/various	Scheme of arrangement	X	January 2023
Yunneng Wind	Taiwan	Restructuring plan	X	August 2023

What emerges is a clear bifurcation. On one side are cases like Adler, Atento, China Fishery, Lowen Play, and Smile Telecoms, where UK processes were bolstered by careful jurisdictional engineering or parallel foreign proceedings. These debtors recognised that a London judgment alone would not guarantee cross-border enforceability, and so incorporated jurisdictional safeguards into their strategies. On the other side are cases such as Cimolai, Hong Kong Airlines, and Yunneng Wind, which relied on domestic or sector-specific mechanisms to complement the UK process, exposing themselves to greater enforcement risk.

The lesson is twofold. First, the UK remains a critical component of global restructurings: its courts are flexible, innovative, and trusted. Second, however, the UK can no longer serve as a stand-alone solution. Even when a restructuring plan is sanctioned in London, debtors typically need additional scaffolding abroad to ensure effectiveness. This both increases cost and dilutes the UK’s role as the natural anchor jurisdiction, feeding the sense that London is evolving from Europe’s courthouse into a node in a wider restructuring network.

Competitive Position of Alternative Jurisdictions

The erosion of automatic EU recognition has created space for other jurisdictions to compete more directly with London. Each offers a blend of legal certainty and procedural innovation, and many debtors now weigh the predictability of recognition more heavily than the technical creativity of the forum.

Ireland has emerged as a natural competitor. Its examinership procedure allows for the restructuring of companies under the protection of the Irish courts, while its EU membership guarantees recognition across the bloc. The common law system makes it a familiar venue for US and UK practitioners, and recent cases in the aviation sector highlight its appeal for international businesses with assets spread across Europe.

The Netherlands has advanced rapidly with the WHOA (Wet Homologatie Onderhands Akkoord), a restructuring framework introduced in 2021. WHOA permits cross-class cram-downs similar to the UK’s Part 26A plan but benefits from EU-wide enforceability. Dutch courts have already demonstrated flexibility in aviation and shipping restructurings, positioning the Netherlands as a serious alternative for mid- to large-cap corporates.

Germany’s StaRUG, launched in 2021, has seen slower uptake. Its design is robust, offering pre-insolvency restructuring options, but German legal culture and cautious creditor attitudes have limited its momentum. Nevertheless, for companies with significant German creditor bases, StaRUG provides a home advantage and certainty within the EU framework.

Against this backdrop, London faces a dilemma. While its courts innovate with bespoke schemes, corporations may sidestep the UK in favour of EU venues that combine adequate flexibility with guaranteed enforceability.

Sino-Ocean and Bespoke UK Innovation

The restructuring of Sino-Ocean, one of China’s largest property developers, illustrates both the ingenuity and the limitations of the UK’s post-Brexit toolkit. Sino-Ocean was heavily exposed to the downturn in the Chinese real estate market, holding billions of dollars in offshore debt governed by English law. With creditors dispersed across Hong Kong, Europe, and the United States, it required a forum capable of imposing a global solution.

The company turned to a Part 26A restructuring plan in London. Most strikingly, the plan featured a pari passu cram-down: for the first time, one group of equal-ranking creditors successfully imposed terms on another group of equal rank. This innovation showed London’s courts stretching the restructuring plan to new limits, demonstrating their readiness to adapt doctrine to real-world creditor conflicts. For practitioners, Sino-Ocean confirmed that the UK remains a venue willing to push boundaries in pursuit of workable outcomes.

But the transaction also underscored the UK’s diminished convenience. Sino-Ocean could not rely on automatic EU recognition. Instead, it pursued parallel recognition in Hong Kong, protections under US Chapter 15, and orders from offshore courts to safeguard assets. Each additional step added cost, time, and complexity, an illustration of the structural hurdles Brexit has imposed.

The case captures the paradox of London’s current role. It remains the legal laboratory of choice for cutting-edge restructuring mechanics, but it is no longer a one-stop hub. Debtors can innovate in London, but they must build supporting structures elsewhere to make the innovation effective. This underscored London’s willingness to push doctrinal boundaries, but it also raises recognition risks in jurisdictions where pari passu treatment is viewed as inviolable.

Future Evolution and Market Dynamics

Looking ahead, the UK’s restructuring landscape will be shaped as much by macroeconomics as by legal doctrine. Rising global interest rates have exposed debt vulnerabilities across sectors. The Chinese property crisis continues to destabilise offshore bond markets. Commercial real estate, still reeling from post-pandemic shifts, faces refinancing cliffs, while shipping and energy remain cyclical flashpoints. Each of these sectors produces debtors with multi-jurisdictional footprints, making recognition issues acute.

For investors, this environment encourages caution. Some may diversify away from English-law-governed debt to minimise enforcement risk, favouring instruments issued under Irish or Dutch law. Corporations now increasingly blend processes by pairing a UK scheme or restructuring plan with a Dutch WHOA or US Chapter 15 proceeding, ensuring effectiveness across creditor bases.

Policy responses may eventually reshape this terrain. Ratification of the Hague Judgments Convention would offer incremental recognition gains, though its scope is narrow. More ambitious would be bilateral recognition agreements between the UK and EU states, though these are politically uncertain. In the meantime, UK judges are likely to continue pushing creative interpretations to preserve London’s appeal.

The broader question is whether the UK will specialise in mega high-stakes cases, where its legal ingenuity justifies the complexity, while EU jurisdictions absorb the more routine restructurings. If so, London’s identity as the global restructuring hub may give way to a more specialist but indispensable role.

Conclusion

Brexit stripped London of the recognition and certainty that once underpinned its dominance. Today, UK schemes and restructuring plans remain legally creative but require scaffolding through parallel EU or US proceedings. London is no longer a one-stop hub but a specialist laboratory for high-stakes cases. Debtors now face a trade-off: Europe offers predictability while London offers innovation. The UK’s role may be narrower, but it will remain indispensable in the right cases.

BIBLIOGRAPHY

Cases

Re Codere Finance (UK) Ltd [2015] EWHC 3778 (Ch).
Re Metinvest BV [2016] EWHC 1868 (Ch).

Academic & Journal Articles

Wells P and Aconley L, ‘How to Get Recognised: Cross-Border Recognition of Insolvency and Restructuring Proceedings Post-Brexit’ [2021] Butterworths Journal of International Banking and Financial Law 187.

Professional Publications, Law Firm Briefings & Technical Papers