Brexit removed the automatic EU safety net. Since 1 January 2021, main insolvency proceedings opened in EU member states no longer carry across the Channel by default, and UK office‑holders can’t rely on Brussels to legitimise their work overseas. In England and Wales the gatekeepers are now the Cross‑Border Insolvency Regulations 2006 (CBIR), section 426 of the Insolvency Act 1986, and cautious common law. For directors under pressure, that shift has created room for creative-and sometimes aggressive-tactics.
Here is how it works in practice. Recognition of a foreign process by the High Court can pause English enforcement and buy time for a restructure largely run outside the UK. Restructuring advisers-often not licensed insolvency practitioners in Britain-plot a route that puts the company under an overseas court while asking London to respect that foreign umbrella. The manoeuvre is clever because it targets immediate threats (freezing orders, winding‑up petitions, security enforcement) without the baggage of a domestic administration.
The legal tools are familiar but the way they are deployed has changed. Under CBIR (the UK’s enactment of the UNCITRAL Model Law), a foreign representative may ask the High Court to recognise either “foreign main” proceedings-opened where the debtor has its centre of main interests (COMI)-or “foreign non‑main” proceedings-opened where the debtor has an establishment. Recognition of a foreign main proceeding triggers an automatic stay on creditor action and on asset transfers; in a non‑main case the court can grant discretionary relief.
A second route is section 426. If the foreign court is in a “relevant country or territory” (largely Commonwealth jurisdictions such as Bermuda, Cayman, Hong Kong, Australia, Canada and Ireland), it can issue a letter of request and the English court may apply either English insolvency law or the requesting state’s law to assist. The United States is not on that designation list-an omission that matters-so US processes rely on CBIR or common law rather than s426.
Common law co‑operation still exists but the Supreme Court clipped its wings. In Rubin v Eurofinance the Court confirmed there is no special insolvency shortcut for enforcing foreign judgments in England: the usual “Dicey” jurisdiction rules apply and the Model Law does not itself let English courts enforce insolvency‑related judgments. Cambridge Gas-the high watermark for universalism-was declared wrong in this respect. Any playbook that assumes a foreign judgment will simply be rubber‑stamped in London is misreading the law.
There is also a brick wall for those trying to write off English‑law debt in a foreign court. The rule in Gibbs means an English‑law contract is not discharged by a foreign insolvency unless the creditor has submitted. The Court of Appeal’s decision in Re OJSC International Bank of Azerbaijan shows the limit: the bank obtained CBIR recognition and a moratorium, but the English court refused to extend that stay indefinitely once the Azeri process ended, rejecting an attempt to sideline English‑law rights. The message is clear-run a parallel English scheme or plan if you want to compromise English‑law claims.
What, then, are advisers doing for directors in distress? One tactic is “recognition‑first”: open proceedings in a hospitable forum abroad, get recognised in London to stop the bleeding, and restructure under that foreign court’s supervision. Another is to use offshore “light‑touch” provisional liquidation so the directors remain in place under the eye of court‑appointed provisional liquidators while a deal is negotiated. That technique, seen in Bermuda and the Cayman Islands, often runs in parallel with schemes of arrangement and has been recognised by foreign courts including in Chapter 15 cases in the US.
The Noble Group restructuring shows the playbook at its most sophisticated. The company shifted COMI to London, obtained sanction of an English scheme of arrangement alongside a Bermuda scheme, secured Chapter 15 recognition in New York, and then-when Singapore regulators blocked a listing transfer-moved into light‑touch provisional liquidation in Bermuda so the court‑appointed office‑holder could finish the job. This sequence kept hostile action at bay while the capital structure was recut.
But the courts have drawn lines. In Sturgeon Central Asia Balanced Fund the High Court terminated recognition where the Bermuda process was a solvent winding‑up on just and equitable grounds: CBIR is for insolvency or severe financial distress, not tidy‑ups for solvent funds. Directors and advisers who push solvent proceedings through the CBIR gateway should expect heavy scrutiny and the risk of a swift reversal.
Europe has become a harder audience too. With EU automatic recognition gone, cross‑border plans-like Adler’s-now face a patchwork of outcomes and post‑sanction appeals. London can still sanction, but effectiveness abroad depends on each state’s rules, and courts will not bend English law to cure foreign defects. For creditors, that fragmentation can be a lever; for debtors, it is a risk that must be priced and planned.
For creditors confronting a recognition‑led strategy, there are pressure points. Challenge COMI or “establishment” evidence; argue that the foreign process is not collective; push the court to limit relief in non‑main cases; and resist any attempt to turn a temporary moratorium into a de facto discharge of English‑law debt. The Court of Appeal’s refusal to prolong the IBA moratorium is the key authority to reach for.
Policy is moving, but slowly. Government has signalled it wants to implement two newer UNCITRAL texts: the Model Law on Enterprise Group Insolvency (to coordinate group cases) and the Model Law on Recognition and Enforcement of Insolvency‑Related Judgments. The latter could soften Rubin’s effect by letting courts recognise certain insolvency‑related judgments, but ministers have not put it into force; the Insolvency Service says work is ongoing, with group tools targeted first.
One final accountability point. When there is no UK appointment, the restructuring advisers driving these cross‑border strategies are not acting as licensed insolvency office‑holders here-and so sit outside Britain’s practitioner regulation regime. By contrast, UK office‑holders are policed by recognised professional bodies under Insolvency Service oversight. Creditors should ask blunt questions about who is in charge, who is regulated, and who is getting paid.