Legislative changes in Singapore and the EU introduce pre-insolvency processes facilitating non-consensual debt restructurings or cram downs comparable to those already available in London and New York. In particular, the EU Recast Insolvency Regulation (the "Recast Regulation") came into effect on June 26, 2017, enhancing cross-border co-operation for applicable insolvency proceedings starting in the EU after that date.*

The Recast Regulation will apply to insolvency proceedings against debtors with their center of main interests in the EU (excluding Denmark). This provides a framework for co-operation between office holders and, for the first time, gives protection to pre-insolvency proceedings (such as those in France and Spain).

The European Commission released proposals for further ambitious reforms in November 2016, aiming to establish a common preventative restructuring process, which would see the debtor continuing its business as a going concern, with the benefit of a statutory moratorium on insolvency processes, while a restructuring plan was developed and voted on.

Moreover, at the member state level, there has been a market trend across the Europe Union towards the introduction of pre-insolvency rescue procedures. The latest to join the fray is The Netherlands, which is about to introduce a mechanism that will allow debt cram down.

Reforms in EU jurisdictions raise the question whether post-Brexit new centers of international debt restructuring may emerge to compete with London’s pre-eminent position as a hub for cross-border restructuring work (alongside New York).

Singapore has also made a major push into the international restructuring arena with significant reforms underway to make it a more attractive landscape for cross-border restructuring and insolvency, including the adoption of the UNCITRAL model law. The Singaporean measures are modelled on the UK scheme of arrangement but also incorporate key Chapter 11 concepts such as DIP financing, worldwide moratoriums and cram down provisions.

*Dechert assisted AIMA with their response to the proposal for the Recast Regulation.