Jurisdiction(s):
United Kingdom

Re Light SA: English High Court sanctions cross-border scheme with New York-to-English law change, third-party releases and international recognition; sufficient connection confirmed for Brazilian debtor

Published on: 03 January 2025

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Re Light Sa Em Recuperação Judicial [2024] EWHC 2733 (Ch) What are the practical implications of this case?

The High Court’s endorsement of the Scheme carries notable practical consequences for international restructuring practice, especially in cross‑border insolvencies.

First, the matter showcases the adaptability and usefulness of English law and the English courts in delivering sophisticated multinational restructurings, including for entities with no UK domicile. By approving a Scheme that shifted the governing law from New York to English law solely to implement the restructuring, the court evidenced a pragmatic willingness to enable effective reorganisations of overseas businesses.
Second, the ruling spotlights the centrality of international enforceability and recognition to cross‑border restructuring techniques. The court examined whether the Scheme would be recognised in Brazil, the principal jurisdiction of Light SA’s operations, and considered prospective recognition in the US on comity grounds. This underlines the requirement that schemes of arrangement bite outside the UK, so that restructuring efforts achieve real effect.
Third, the judgment demonstrates the tactical deployment of schemes of arrangement to avoid more onerous or less favourable domestic insolvency paths in pursuit of a coherent, predictable and efficient outcome for stakeholders across relevant jurisdictions and circumstances. Accordingly, by opting for...

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