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Brexit: cross border restructuring and insolvency update

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You may know that the EU and the UK agreed the terms of the UK’s withdrawal from the EU. This means that, as from 31 January 2019 (“Exit Day”), the UK was no longer a member of the EU.

However, during a transition period ending on 31 December 2020, which can be extended, EU law will, subject to certain limited exceptions, continue to apply to the UK as it did before Exit Day. In effect, during the transition period the EU, its Member States and the UK will continue to act as if the UK were still in the EU.

During the transition period the UK will not participate in EU institutions and decision-making, but the CJEU’s jurisdiction relating to the UK will continue. As the UK will not be a Member State, international agreements between the EU and third countries will no longer apply to the UK. However, the EU has notified third countries that during the transition period the UK should be treated as a Member State for the purposes of the relevant agreements.

What happens after the transition period depends on what is agreed between the EU and the UK during the transition period.

In relation to UK-EU cross-border restructuring and insolvency, the status quo is in effect preserved during the transition period. Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings continues to apply to the UK (see Article 67(3) of the Withdrawal Agreement), as do other related laws such as Brussels I (recast) on jurisdiction, the Rome Regulations on governing law and the Lugano Convention.

What happens after the end of the transition period is uncertain, but when the timing of any future impact on UK-EU cross-border restructuring and insolvency becomes clear we will let you know.

Meanwhile we will continue to seek to involve you in UK-originated cross-border restructuring and insolvency matters relating to your jurisdiction and we look forward likewise to helping you with any UK cross-border restructuring and insolvency matters that you encounter.

If you want to discuss Brexit and European cross-border restructuring and insolvency in more detail please contact me.

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