United Kingdom: Financial Restructuring

Chinese businesses and investors face unique challenges when enforcing debts or acquiring distressed assets in the UK. Understanding the insolvency waterfall, formal enforcement options including administration and receivership, and strategic opportunities like pre-pack sales can provide significant advantages in protecting financial positions and identifying acquisition opportunities at discounted valuations.

Recent Court decisions on restructuring plans for Las Iguanas, Poundstretcher, and TG Jones companies reveal critical insights for businesses seeking to compromise property-related and supplier liabilities.

The UK market continues to experience a mixed economic environment that is driving both restructuring activity and opportunistic dealmaking. Persistent cost pressures, higher borrowing costs than those seen during the previous decade, and ongoing geopolitical uncertainty have placed strain on businesses with leveraged balance sheets or tight cash flow positions. As a result, I have noted that many of my clients are seeking to refinance existing debt, renegotiate contractual arrangements, reduce operating costs, or undertake more formal restructuring processes.

The Court of Session has taken a novel approach to assessing unfair prejudice in CVA challenges, moving beyond traditional vertical and horizontal comparisons to consider broader equitable factors. This first reported Scottish decision in such circumstances could make predicting CVA challenge outcomes significantly more difficult if the approach is adopted in future cases.

The decision explores the limits of the Court of Appeal’s findings in Sequana as to when dividends may be transactions at an undervalue, and suggests a “common sense” approach to identifying the relevant transaction.

The decision indicates that the minority creditors intend to bring a claim against the security trustee and majority creditors, in which they will seek to unwind an out-of-court restructuring

In Webb and another (as liquidators of Eversholt Rail (365) Limited (in liquidation)) v Eversholt Rail Limited and another [2026] EWHC 101 (Ch), the High Court dismissed the liquidators' appeal against a decision not to allow their extensive application for the production of documents under s.235 and s.236 of the Insolvency Act 1986 (IA 1986).

The casual dining and hospitality sector is navigating a period of profound upheaval, driven by macroeconomic pressures, regulatory uncertainty, and shifting consumer preferences.

UK insolvency professionals are experienced in advising the executives of struggling businesses about the potential personal risks if their company files for insolvency.