Foreign creditors—the position under the Insolvency (England and Wales) Rules 2016
Produced in partnership with South Square & BDO
Foreign creditors—the position under the Insolvency (England and Wales) Rules 2016

The following Restructuring & Insolvency practice note produced in partnership with South Square & BDO provides comprehensive and up to date legal information covering:

  • Foreign creditors—the position under the Insolvency (England and Wales) Rules 2016
  • Foreign creditors
  • Foreign currency debts
  • The EC Regulation on Insolvency Proceedings/the Recast Regulation/the Retained Recast Regulation
  • Effect of the Cross Border Insolvency Regulations (CBIR)

Foreign creditors

There is no bar on a foreign creditor proving in an administration, liquidation or bankruptcy proceeding in England. Similarly, on their discharge from bankruptcy, an English debtor is released, so far as the English court is concerned, from their liability to foreign creditors (Swiss Bank Corporation v Boehmische Industrial Bank).

Neither the Insolvency Act 1986 (IA 1986) nor IR 2016, SI 2016/1024 provide any special rules for the procedure by which a foreign creditor can submit a proof of debt in England and Wales.

Foreign currency debts

There is specific guidance in relation to debts in a foreign currency. However, this rule could arguably apply to local as well as foreign creditors (depending on the currency of the underlying agreement) (IR 2016, SI 2016/1024, r 14.21).

Under these rules, for the purpose of proving a debt incurred or payable in a currency other than sterling, the office-holder must convert the amount of the debt into sterling at a single exchange rate for each currency determined by reference to the exchange rates prevailing on the 'relevant date' under IR 2016, SI 2016/1024, r 14.1, ie when (a) the company went into liquidation (or, if the liquidation was immediately preceded by an administration, on the date when the company entered administration) (b) the company went into administration (or, if the administration was immediately preceded by a winding up, on

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