Political, regulatory competition and the U.K. debt-restructuring regime at the crossroads

This article analyses CIGA 2020 reforms to the U.K. insolvency and debt-restructuring regimes, particularly, the new part 26A restructuring plan, the creditor cross-class cramdown and the new standalone moratorium and their impact on the U.K. insolvency and debt-restructuring landscape. The article contends that these permanent changes were not needed immediately, in the aftermath of Brexit and COVID-19 experiences. Rather, temporary time-limited changes would have been ideal, followed by an impact assessment that would inform desired course of reforms, rather than fast-tracked reforms that may have been driven by political and regulatory competition. The article further argues that these CIGA 2020 reforms could instigate a policy shift, from a pro-creditor to a pro-debtor restructuring regime, that questions the United Kingdom's overall policy objective moving forward.