A year on from the Court of Appeal’s Petrofac decision — which many read as a blow to the UK’s Part 26A restructuring plan (RP) process — the regime appears to have emerged stronger rather than weakened.
As practitioners adapt to heightened judicial scrutiny, the English restructuring plan is increasingly being embraced by US-linked debtors seeking an alternative to Chapter 11. “A lot of people were quick to cast Petrofac as the end of the rapid uptick in the use of RPs, but for us it was all part of its natural evolution of the RP as developed by the judges,” says John Houghton, co-chair of Greenberg Traurig’s Global Restructuring & Special Situations practice and chair of the London Restructuring & Bankruptcy practice
Key points: – Concerns arising from the 2025 Petrofac judgment have eased, and the UK’s restructuring plan regime has regained its footing. – Part 26A proceedings remain too expensive and resource-consuming for UK mid-caps, but are attractive to US corporates looking for an alternative to Chapter 11. – Three Nasdaq-listed issuers — Fossil, Argo Blockchain and NFE — opted for UK RPs rather than Chapter 11, opening up a cross-border restructuring route for US-listed groups. – Obtaining recognition of English proceedings in the US through Chapter 15 requires careful adherence to US recognition requirements, newly spelt out in a New York court’s July opinion. Inflection point The flexibility of the UK restructuring plan, particularly its ability to deliver outcomes that may be unavailable under Chapter 11, is making it an increasingly attractive option for US-connected debtors. So pronounced is this trend that a New York bankruptcy court in mid-July published a lengthy opinion outlining the guardrails for Chapter 15 recognition of UK restructuring plans — signalling both acceptance of this transatlantic route and increased scrutiny of how it is used. “We are at an inflection point.
UK RPs are now considered a genuine alternative to pre-packaged Chapter…