The UK Two-Step: scheming to supplant Chapter 11 with Chapter 15

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Chapter 15 of the United States Bankruptcy Code directs United States courts to “recognize” qualifying foreign insolvency proceedings. Recognition, in turn, is intended to give local effect to relief granted abroad, essentially deputizing United States courts as auxiliaries of foreign courts, empowered to enforce the foreign decree. This enforcement takes place even if the foreign proceeding adversely affects domestic creditors and even if the foreign proceeding employed restructuring methods not generally permitted by United States law.

Within the last several years, however, the United Kingdom, Germany, and the Netherlands (among others) have liberalized their reorganization laws by authorizing practices and procedures forbidden or unknown under United States law. These amendments were generally at the behest of insolvency professionals, who believed these new methods promoted better and cheaper reorganizations.

This lecture will explore how a United States company could first file a Scheme of Arrangement, and then seek to enforce it in the United States, a sort of UK Two-Step. This Two-Step would have the effect of granting UK relief to a US debtor and avoiding the cost and excess time Chapter 11 cases often require.

Speaker: Professor Bruce A. Markell

Professor Markell is the Professor of Bankruptcy Law and Practice, and the Edward Avery Harriman Lecturer in Law at the Northwestern Pritzker School of Law. in Chicago, Illinois, USA.  He is a retired bankruptcy judge and a life member of the American Law Institute, a fellow of, and a past scholar in residence at, the American College of Bankruptcy, and a founding member of the International Insolvency Institute.  In 2016, he completed a project redrafting Kosovo’s bankruptcy law.

Chair: Professor Sarah Paterson

Sarah Paterson (lse.ac.uk)

This event will be followed by a drinks reception.