A glance at the business page headlines reveals that one of your key customers has filed for Chapter 11 protection. What impact will this have on your business? How will you recover a substantial book debt? How should UK management respond? Take another scenario – your US parent company has filed for Chapter 11 protection. What are the implications here on how the UK business is run? Does this mean immediate liquidation of the UK arm?
The above examples are ones which have increasingly become mainstream issues for businesses operating in the UK and the rest of Europe. Even where a UK company is not part of a multinational group structure, with the globalisation of capital and financial markets, it is likely that many companies will have assets (including debtors and on-going contracts) and creditors in more than one jurisdiction. It follows, then, that there is a greater likelihood that directors of UK companies will need to consider cross-border insolvency issues, whether they arise in the context of an overseas parent or sister company, or where an unconnected overseas supplier or customer is facing financial difficulties.
