The process of Brexit will take years, and the implications for our clients' businesses will unfold over time. Our MoFo Brexit Task Force is coordinating Brexit-related legal analysis across all of our offices, and working with clients on key concerns and issues, now and in the coming weeks and months. We will also continue to provide MoFo Brexit Briefings on a range of key issues. We are here to support you in any and every way that we can.
Instead of looking wistfully east, smitten by gloom at the prospect of falling out of the European Insolvency Regulation (EIR), the UK ought to be turning west. It's not Brexit that provides an opportunity, nothing so clichéd because the country could actually do this anytime, but the UK should seize this moment of realignment to improve the UK insolvency system. Not so much to make it the best in the world but with the aim of making it familiar.
"We're all doomed!" they say, but...
Read a random sampling of law firm summaries of the consequences of Brexit for the UK as an international corporate restructuring centre and one is struck by the underlying mood of pessimism. The UK, on exiting the EU, will lose the mutual recognition of insolvency proceedings among Member States conferred by the EIR. While the scheme of arrangement (SoA), a restructuring tool that has been precociously successful in attracting foreign companies to London to undertake massive restructurings, is technically unaffected, European sentiment may turn against the SoA. The enforceability of SoAs in EU countries, something the UK has taken very much for granted while a member of the EU, may be challenged, undermining their use.
Absent a treaty with the EU to recreate the EIR, that will be it.
No one expects the UK government or the EU to have replacing the EIR with an international treaty to the same effect high on the negotiating agenda. Plus the EU Commission already plans to further align European insolvency regimes. Without the UK, the difficult common law outlier, and fueled by a desire to publicly commit to the European ideal, harmonisation of the 27's insolvency laws must be on the cards. So not only does the UK lose the EIR, it may see the rump of the EU accelerating away - hence the gloomy attitude to the restructuring consequences of Brexit is no surprise.
It's all about perception
Just weeks before the Brexit referendum, on 25 May, the government published a consultation document with four big ideas for reforming...