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London calling—crossing the Atlantic to restructure in England?

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Published Date

Sep 25, 2026

Related people

Fred SosnickPartner, New York

Katrina BuckleyPartner, London

Luckey McDowellPartner, Dallas

Karen McMasterPartner, London

Sara CoelhoPartner, New York

Joseph BrownPartner, New York

Christopher PoelSenior Knowledge Lawyer, London

Philip WellsSenior Associate, London

Mira J. SoldonAssociate, New York

In the space of less than a year, three Nasdaq-listed companies headquartered in or closely connected to the United States—namely Argo Blockchain, Fossil, and New Fortress Energy—have successfully completed significant restructurings pursuant to the English Restructuring Plan (RP) under Part 26A Companies Act 2006, underscoring the emergence of the RP as a credible option certain U.S. companies may consider for their operational turnarounds and balance sheet restructurings alongside Chapter 11.

In each case, the debtors successfully achieved recognition of their RPs in the United States pursuant to Chapter 15 of the U.S. Bankruptcy Code. The U.S. Bankruptcy Court scrutinized the details of the relevant deal to ensure that “forum shopping” was not used to try to “circumvent the requirements of the U.S. Bankruptcy Code to disadvantage some creditors,”1 but was satisfied that was not the case and blessed the RPs with Chapter 15 recognition—even in circumstances where an RP includes elements which would not otherwise be available in a Chapter 11 (such as non-consensual third-party releases).

To help inform stakeholders evaluating their options in light of these recent decisions, our U.S. and London Restructuring teams have prepared the below infographic to highlight some of the principal differences between and advantages of Chapter 11 and the RP, and the circumstances in which a debtor may elect to pursue either option. Please contact any member of the A&O Shearman Restructuring team if you would like to discuss any of these matters further.

U.S.Chapter 11 (bankruptcy code)	Comparision topic	UK part 26A rectructuring plan (Companies Act 2006)
U.S. Advantage Broad access—Residence, domicile, place of business Entry/Eligibility OR property in U.S. Determined by a “peppercorn” test (e.g., retainer to U.S. counsel typically suffices).	Entry/Eligibility	England-incorporated obligor or overseas co. with “sufficient” connection to England (e.g., English-law debt, or centre of main interests in England).
U.S. Advantage Automatic stay of all other legal proceedings and actions against the debtors’ assets upon filing (§362). This applies worldwide and requires no hearing to obtain. Contractual ipso facto clauses are unenforceable.	Stay/Moratorium	No automatic stay (although can potentially be coupled with a standalone statutory moratorium). Convening order bars operation of termination rights arising as a result of insolvency in respect of contracts for the supply of goods or services (not financial contracts).
Prepack can be achieved as quickly as a few days (to the extent required consents obtained prepetition); pre-solicited can be achieved within appx. 60 days; pre-arranged appx. 3–6 mos; “free-fall” (i.e.. no pre-negotiated compromises) can be many months or years. Anticipated timing is subject to the type of Chapter 11 case: Pre-packaged: as quickly as a few days (to the extent required consents obtained prepetition) Pre-Solicited: within appx. 60 days	Timetable and costs	UK Advantage. 6–10 weeks from launch to court sanction. Generally lower cost for complex holistic restructurings.
U.S. Advantage. Lenders to the bankrupt debtor can obtain “priming” (new senior) liens, access to cash collateral with adequate protection to secured lenders, superpriority administrative claims.	DIP financing	No statutory DIP regime; the priority of any interim/bridge financing will depend on contractual agreement (e.g., under relevant intercreditor arrangements).
Class-by-class: requires 2/3 in amount and >1/2 in number (claims); Plan proponent can identify the classes for voting purposes.	Voting	75% in value of each class present and voting (no numerosity test). Plan proponent can identify the classes for voting purposes.
Confirmed plan binds parties subject to U.S. personal jurisdiction; overseas enforcement depends on foreign law and comity. Cross-border complexity increases in pre-pack scenarios. Subject to Gibbs (see UK opposite), the U.S. offers significant cross-border advantages via Ch. 15.	Cross-border	Is capable of compromising foreign-law claims—court needs evidence plan has a reasonable prospect of being effective/recognized in relevant jurisdictions (usually in the form of foreign expert reports). Is capable of recognition under Ch. 15 in the U.S. (see opposite). The “Rule in Gibbs” prevents English law governed debt being compromised by an overseas restructuring/insolvency procedure except in limited circumstances.
At least 1 impaired accepting class +“fair and equitable”. Absolute priority rule (“APR”) must be satisfied to implement restructuring plan, which requires that senior creditors are paid in full before juniors, subject to certain limited exceptions.	Cross class cramdown and priority treatment	UK Advantage. Cross-class cram-down available provided: (i) creditor is “no worse off” under the plan vs. “relevant alternative” (i.e., most likely outcome if plan is not sanctioned); and (ii) at least one in-the-money class approves the plan. No APR but court will require evidence to confirm fair allocation of restructuring value—fair allocation is typically demonstrated via expert reports showing creditors’ contributions to plan vs the benefits it will receive (and justifications for any imbalance), the “no creditor worse off” analysis and evidence of meaningful engagement with creditors ahead of launching the plan.
After U.S. Supreme Court decision in Purdue Pharma (2024), non-consensual third-party releases (e.g., non-debtor stakeholders) are prohibited. Consensual releases remain permissible. Open issue: what constitutes consent to release; affirmative consent is safest. Courts remain split on whether notice and failure to opt out of release is permitted.	Third-party releases	UK Advantage. Vast majority of claims can be released—including releases of intra-group guarantees. Exception: claims which are not required to be released to enable plan to succeed—e.g., claims a company may have (and by extension, any subsequently appointed insolvency officeholder) against its own directors for breach of duty.
Whole-entity case—Absent prepetition agreement with stakeholders on the restructuring, a debtor must classify and address all claims/interests. Complete resolution can be advantageous in complex operational restructurings requiring a holistic resolution. In a non-prepack case, ability to address all claims is particularly valuable.	Scope	UK Advantage. Surgical tool—plan proponent can select which classes of creditors/members will participate in the plan (could, for example, exclude trade creditors/suppliers if they are needed to continue to operate the business).
U.S. Advantage. Reject/assume/assign “executory” contracts and leases; retention and incentive plans in conjunction with restructuring; create liquidation trusts; broadest post-effective operational toolkit.	Operational tools	No specific mechanism for dealing with executory contracts, but plan can be used to e.g., compromise claims and amend existing terms. Plan cannot outright interfere with proprietary rights (e.g., leasehold interests) or impose new obligations following the restructuring—albeit certain common workarounds may be avaialble.
U.S. Advantage. Sale can be structured standalone, in a restructuring plan or even as a toggle to a restructuring plan.or even as a toggle to a restructuring plan. Standalone: §363 permits court approved, free-and-clear sales before plan confirmation, typically following a market check/auction. Under a plan: Sales may be implemented through a confirmed plan, avoiding “sub rosa plan” objections applicable to §363 sales.	Asset sales	No specific mechanism for delivering asset sales but can be facilitated by (or delivered in parallel to) a plan.
Extensive and continuous: disclosure statement + confirmation hearing; deferential but costly.	Court process	Two substantive hearings only (subject to appeal and costs/case management hearings): convening (initial review of plan and composition of classes by the court) + sanction (substantive review of plan following creditor vote, including overall fairness; court decides whether to exercise discretion to approve the plan).