Brexit no deal—impact on insolvency

Brexit no deal—impact on insolvency

One of the second batch of ‘no deal’ technical notes’ published by the government on 13 September 2018 is a guidance note ‘Handling civil legal cases that involve EU countries if there’s no Brexit Deal’. The government has issued its guidance on its stance should the UK leave the EU without agreement (a ‘no deal’ scenario), including that the Recast Regulation on Insolvency, Regulation (EU) 2015/848 would be repealed.

Original news

On 13 September 2018, the government issued guidance on its stance should the UK leave the EU without agreement (a ‘no deal’ scenario). While stressing that a no deal scenario remained unlikely, they have issued a series of technical notices setting out information to allow businesses and citizens to understand what they would need to do in a no deal scenario, so they can make informed plans and preparations.

Cross-border insolvency cooperation

Importantly for R&I lawyers, the guidance says that the majority of the Recast Regulation on Insolvency, Regulation (EU) 2015/848 would be repealed in all parts of the UK. The UK would retain ‘the EU rules that provide for the UK courts to have jurisdiction where a company or individual is based in the UK, and the law will ensure that insolvency proceedings can continue to be opened in those circumstances. But after exit, the Recast Regulation on Insolvency tests would no longer restrict the opening of proceedings, and it would also be possible to open insolvency proceedings under any of the tests set out in our domestic UK law, regardless of whether (or where) the debtor is based elsewhere in Europe.’

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About the author:
Kathy specialises in restructuring and cross-border insolvency. She qualified as a solicitor in 1995 and has since worked for Weil Gotshal & Manges and Freshfields. Kathy has worked on some of the largest restructuring cases in the last decade, including Worldcom, Parmalat, Enron and Eurotunnel.