Mr Alastair Beveridge
President

Alastair guides companies through complex financial restructurings based on his three decades of experience in assisting financially stressed businesses to preserve value through a combination of dialogue with stakeholders, contingency planning, and, ultimately, insolvency processes, many of them with substantial and innovative cross-border elements.

Alastair specializes in cross-border advisory and formal insolvency appointments. Alastair has a Bachelor of Engineering in mining and petroleum engineering from Strathclyde University. He is a licensed insolvency practitioner, a Certified Management Consultant, a fellow of the Institute of Chartered Accountants in England and Wales, past president of INSOL Europe and current President of INSOL International.

KEY GLOBAL DEVELOPMENTS AND TRENDS IN RESTRUCTURING AND INSOLVENCY

The restructuring and insolvency landscape continues to evolve, and occasionally surprise, at a relentless pace around the world. Businesses face ongoing financial pressure in a climate of stagnant growth, higher interest rates and tight liquidity.

In its latest World Economic Outlook, the International Monetary Fund projects that, while inflation will continue to decline, economic growth will remain “underwhelming”, with risks to the global outlook favouring the downside due to factors such as geopolitical tensions, the disruption of supply chains, and elevated policy uncertainty.1 Allianz has estimated that a projected further increase in business insolvencies in 2025 will place over 1.6 million jobs at risk in Europe and North America alone.2

The need for effective restructuring and insolvency systems to assist debtors and creditors alike to navigate financial distress is therefore ever-present but is not addressed by every government with the same speed or effectiveness.

We have seen a raft of decisions from courts around the globe on new restructuring tools and cross-border insolvency matters in the last year.

The English Court of Appeal’s decision in the Adler matter was the first time the Appeal Court had considered a restructuring plan and the scope of the cross-class cram down since the introduction of the restructuring plan procedure in the United Kingdom in 2020. The Court’s decision confirms that the pari passu principle applies to restructuring plans, and that a court must carefully consider the fairness of a proposed plan in exercising its discretion to sanction a plan involving a cross-class cram down.

In the Netherlands, the Dutch Supreme Court issued a landmark judgment in October 2024 confirming that a WHOA restructuring plan cannot compel financiers to provide new funding or accept new obligations under existing facilities (although it is possible to change the order of priority among creditors as part of a WHOA plan).

The Singapore International Commercial Court (SICC) handed down its first insolvency-related judgment in the Garuda Indonesia matter, granting recognition and enforcement of Garuda Indonesia’s restructuring proceedings and restructuring plan and providing important guidance on the scope of the “public policy” exception to recognition under the Model Law framework. In July 2024, the SICC also approved the pre-pack restructuring plan of No Va Land Investment Group, a foreign company registered in Vietnam – demonstrating the potential for the SICC to function as a viable option for flexible multi-jurisdictional restructurings in other matters going forward.

The controversy has also continued over non-consensual third-party releases, with the United States Supreme Court ruling they cannot be included in a Chapter 11 restructuring plan in its decision in Purdue Pharma. However, a number of unresolved issues await clarification, including the extent of consensual releases that can be included in a restructuring plan, and the potential for non-consensual releases under a foreign restructuring plan to be recognised under Chapter 15. The debate about non-consensual releases continues in other jurisdictions, especially as attempts to use releases may increase as regulatory responsibilities for corporate managers grow in tandem.

Elsewhere, the United States Bankruptcy Court also issued a memorandum on the valuation of cryptocurrency claims, which can fluctuate and appear imprecise, in the ongoing FTX bankruptcy. This provides a useful standard in other jurisdictions, as digitisation, and in some cases raw political power, fuels the growth of crypto and other digital investments and funding sources for companies.

Advances in artificial intelligence (AI) capability are also transforming the globe, including our industry. Technology assisted review (TAR) enables insolvency practitioners to review substantial volumes of information with maximum efficiency, and to potentially identify fraudulent transactions and assist in the complex process of asset tracing across borders. This technology looks set to be able to help practitioners to process creditor claims and assist in convening creditor meetings. Greater efficiency in the insolvency process will in turn enhance creditor returns, one of the key objectives of any best practice insolvency system.

AI is also being actively utilised in the design of early warning tools that can be used by debtors and stakeholders to identify when the debtor is in financial distress. By discerning key insolvency risk factors, these tools could become critical in maximising the opportunity for distressed debtors to preserve working capital and pursue potential restructuring options to avoid a potential liquidation or bankruptcy outcome.

On the topic of asset tracing, UNCITRAL’s Working Group V is also continuing work on a draft descriptive text and toolkit that sets out the steps to expedite asset tracing and recovery in insolvency proceedings. This draws on the work of other organisations such as UNIDROIT and may offer a means to enhance recovery efforts and maximise cross-border cooperation for the benefit of creditors and other insolvency stakeholders.

Alternative dispute resolution (ADR) also continues to be highly beneficial in the insolvency landscape. Mediation and arbitration especially can be used to resolve complex creditor claims outside the “adversarial cauldron” of the court, and to guide creditors towards a consensus that could result in the adoption and implementation of a viable value-preserving restructuring plan.

At the same time, however, 2024 saw the important decision of the Privy Council in Sian Participation, in which it was held that that an arbitration clause in a creditor agreement with a debtor will not automatically cause a winding up petition to be stayed unless the underlying debt is genuinely disputed on substantive grounds. Apart from resolving this point of law in England & Wales and the British Virgin Islands, the decision is also expected to have ramifications in other common law jurisdictions, as courts in those jurisdictions are expected to adopt a similar approach.

Law reform efforts also continue around the world. There is a particular focus on MSME insolvency reform, designed to give smaller enterprises, which make up the vast majority of enterprises globally, a greater chance to restructure their affairs in a simplified, cost-effective process that preserves value and avoids a premature liquidation outcome.

Significant law reform and modernisation measures have also been implemented in other jurisdictions over the last year, including the new Bankruptcy Law in the United Arab Emirates, more efficient rehabilitation processes in Brazil, and proposed enhanced bank resolution measures in the United Kingdom – a topic also currently being explored by UNIDROIT in its draft legislative guide on bank insolvency.

Finally, evolving environment and climate change regulations are expected to really start to drive restructuring activity, as many industrial sectors are confronted with the reality of looming net zero emissions targets. This will provide more opportunities for restructuring and insolvency practitioners, but practitioners will need to be cognisant of the increased risk profile for certain cases, which may include items such as environmental clean-up obligations. Who will ultimately bear the cost of such liabilities is a topic for another day but will certainly be of real interest to practitioners.