Restructuring goes transatlantic as firms gear up for more work

US companies buckling under debt have a new go-to venue: London.

Businesses with little or no UK presence are now restructuring in the UK capital instead of in Delaware or under Chapter 11 because it's faster, cheaper, and easier to push through. That's pulling more restructuring work into US law firms' London offices.

In June, New Fortress Energy, a New York-listed company involved in the LNG sector, restructured $9.6 billion of debt in London under a deal sanctioned by the English High Court. Late last year Fossil Group, a Texas-based company that makes and sells watches and handbags, used the UK’s restructuring regime to restructure $150 million of bonds.

“It’s really started to snowball,” says Matthew Czyzyk, head of the London business restructuring group at Ropes & Gray. “This isn’t going to be available to every company in every circumstance but if the stars align, we’ve shown it can be a compelling alternative. There will be more of this because quite frankly it makes sense.”

Third way

Lawyers say the UK now offers a “third way”. A court approved process that is quicker and cheaper than the Chapter 11 process.

Melissa Coakley, head of European restructuring at Sidley Austin, says: “Each of these deals is highly situation specific. What's changed is that the UK plan is now firmly on the checklist for US-based clients as they weigh their options.”

To use this process, US companies must first establish a connection with the UK. In Fossil Group's case, the company set up a holding company in England then amended the governing law of some of its debt from New York to English law.

But even when a company has done so, it’s not always straightforward getting the English courts to agree to sign off on these processes - and new precedents are being set in the courts on a regular basis.

In 2025, the Court of Appeal said that UK oilfield service company Petrofac’s proposed restructuring was not fair to all investors, forcing the company to go into administration later that year.

“Restructuring in Europe and the UK is evolving faster than at any time I can remember in court and out of court,” says Coakley. “The UK plan's superpower is predictability when used correctly. It's built on decades of scheme case law structure it properly and you know your timing, your cost, and that Chapter 15 [US court] recognition will follow.”

Restructuring in Europe and the UK is evolving faster than at any time I can remember.

The English process lets companies force the restructuring deal on all of the creditors - whether they like it or not. But in order to do this “cross class cram down”, the company needs to show the courts that the creditors would be no worse off than the alternative deals.

Alex Jay, head of insolvency at Stewarts Law, says that this not always easy.

“It can be highly complicated with extensive expert evidence on the financial modelling of what would happen in different scenarios. It’s not straightforward at all. There has been and will continue to be a lot argument [in the courts] about this,” he says.

That can be even more complex with US companies who may enter into Chapter 11 or other restructuring processes abroad, processes that English courts will be less familiar with.

What does it mean for lawyers?

This all means more work for US law firms with top-tier US restructuring practices, as most of the work originates from New York-based lawyers who refer work on to their London colleagues.

Ed Stevens, a partner at recruitment firm Bishop Rock Partners, says that firms with “strong LME platforms” and those with top-tier chapter 11 practices will particularly benefit. He says that clients who advise on lots of LMEs in the US expect that about 20% of LMEs turn into restructuring processes further down the line - potentially resulting in many more London restructuring deals.

“That will drive more work into London and Europe in the medium term,” says Stevens, who adds that many managing partners of US law firms in London are looking to hire more restructuring partners in London as a result.

“The major challenge is the number of restructuring partners has not changed. It’s the same size of market but you now have a much bigger demand,” he says. “The London market has become a lot more competitive.”