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The UK enacted UNCITRAL Model Law as the Cross-Border Insolvency Regulations 2006 which was designed to provide a framework to encourage cooperation between jurisdictions. A United Nations treaty cannot otherwise be automatically enacted within any member state – it has to enter the statute book in the same way as any other piece of legislation.
It is under the Cross Border Regulations that Insolvency Practitioners in England & Wales can start main proceedings, if there is a Centre of Main Interests (COMI) commenced in this jurisdiction …
… or non-main proceedings, if there is an ‘establishment’ in this jurisdiction.
[See ‘UNCITRAL’, ‘Insolvency Practitioner’, ‘Centre of Main Interests’, ‘COMI’, ‘Establishment’, ‘Main Proceedings’ and ‘Non-Main Proceedings’.]
A ‘cross class cram down’ is possible in a Restructuring Plan under the Corporate Insolvency and Governance Act (CIGA) 2020; it is not available under any alternative insolvency intervention.
In a proposed Restructuring Plan, creditors are divided into ‘classes’ or types; for example, landlords, voting shareholders, etc. If one of the classes does not agree with the Plan the court can ignore their dissent, if it determines that a dissenting creditor is ‘no worse-off’ than they would be in the ‘relevant alternative’.
The company must also show the court that the Restructuring Plan has been approved by at least one class who would receive a payment under, or have a genuine economic interest in the ‘relevant alternative’.
[See ‘Corporate Insolvency and Governance Act 2020’, ‘CIGA’, ‘Restructuring Plan’, ‘Shareholders’, ‘Scheme of Arrangement’ and ‘Registrar of Companies’.]
If a company takes out a floating charge (individuals cannot take this type of secured lending), the charge will not fix to a specific and specified asset or property, but will ‘float’ over an asset or assets which may change from day-today; such as stock, or book debts, or the director’s loan account.
