Q&As

Do US chapter 7 or 11 bankruptcy proceedings fall within the TUPE definition insolvency proceedings which have been opened

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Published on LexisPSL on 09/09/2014

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • Do US chapter 7 or 11 bankruptcy proceedings fall within the TUPE definition insolvency proceedings which have been opened
  • What are US Chapter 7 or 11 bankruptcy proceedings?
  • How does this interact with TUPE?
  • Does government guidance help?

STOP PRESS: From 6 April 2017, the Insolvency Rules 1986, SI 1986/1925 were revoked and replaced by the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024. The content in this Q&A may have been affected by this change.

What are US Chapter 7 or 11 bankruptcy proceedings?

Proceedings under Chapter 7 of the US Bankruptcy Code are equivalent to liquidation proceedings in the UK (see Chapter 7 liquidation).

Proceedings under Chapter 11 of the US Bankruptcy Code are rescue proceedings where the aim is to preserve and maximise the enterprise value of a company and its assets, in order to maximise distributions to creditors pursuant to an orderly plan of reorganisation (see Practice Note: The US chapter 11 process).

How does this interact with TUPE?

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), SI 2006/246 relaxes some of the rules which would otherwise apply for businesses that are subject to insolvency proceedings under the supervision of an insolvency practitioner at the time of the transfer. For the proceedings

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