Foreword Insol – Insolvency 2026/27

An overview of global insolvency and restructuring trends for 2026–27, including private credit, cross-border insolvency reform, AI, and restructuring market developments.

Tags: 2026/27 / Alastair Beveridge / INSOL INTERNATIONAL / Insolvency / Restructuring

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 specialises 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.

GLOBAL INSOLVENCY TRENDS 2026–27:

PRESENT CHALLENGES AND FUTURE TRAJECTORIES

Economic headwinds are continuing to prove challenging globally. High interest rates, limited access to credit, continued inflationary pressures, declining consumer confidence and labour shortages are placing many businesses under pressure. Sectors such as construction, resources, commercial real estate, tech, healthcare, retail and hospitality are experiencing elevated financial distress. The geopolitical environment also remains volatile and unstable – creating uncertainty in previously reliable and predictable supply chains and key markets, many of which have only recently been able to return to normal post-pandemic.

In light of these downside risks, the World Bank, in its January 2026 World Economic Outlook Update, projects global growth to plateau over the next 2 years – at 3.3% in 2026 and 3.2% in 2027.1 In its 2026-2027¹ Global Insolvency Outlook, Allianz projects global business insolvencies to rise by another 5% in 2026, marking 5 consecutive years of increases to reach a record high – some 24% above the pre-pandemic average.²

This translates into a critical need for effective and efficient restructuring and insolvency systems. Indeed, recent empirical evidence from the World Bank suggests that laws focused on flexible restructuring measures for viable businesses and quick, simple liquidation alternatives for businesses that are no longer viable are linked to increases in productivity, innovation, job creation and long-term economic growth.³

Increased restructuring activity – and the prevalence of constructive restructuring tools (such as cross-class cram down provisions, DIP finance and broad enforcement moratoria) across the US, the UK, Europe and a growing number of jurisdictions in Latin America, Asia and Africa – has led to a number of significant key court decisions in the last 12 months.

In the United Kingdom, important decisions of the English Court of Appeal in 2025 in Thames Water and Petrofac – as well as the High Court’s decision in Waldorf (its Supreme Court appeal having recently been withdrawn) – have made it clear that courts will apply real scrutiny before sanctioning any plan over the objection of one or more classes of creditors. Creditors that would be “out-of-the-money” in the relevant alternative to the plan cannot simply be ignored, and there must be evidence of both meaningful engagement and at least some value being offered to such creditors before a plan can be considered fair in a sanction application to the court. These matters are also reflected in the Revised Practice Statement in respect of Schemes of Arrangement and Restructuring Plans published by the High Court, which took effect from 1 January 2026.

In the US, recent bankruptcy court opinions have recognised and enforced non-consensual third-party releases under Chapter 15, despite the Supreme Court’s ruling in Purdue Pharma in 2024 invalidating such releases in a Chapter 11 plan. This has enabled companies to achieve outcomes in US courts that may not be possible under a Chapter 11 plan, thereby incentivising strategic filings of non-US insolvency proceedings.

The Singapore International Commercial Court has also continued to take a progressive approach to cross-border insolvency recognition. In its 2025 decisions in Terraform and Re Quoine, it was held that a court in Singapore can provide discretionary relief under the UNCITRAL Model Law on Cross-Border Insolvency (Model Law) in an “expansive and open-ended” manner to support multi-jurisdictional restructuring attempts.

These are but a few of the examples of courts drawing or expanding boundaries as they, and practitioners, adapt to new legislation as it operates in practice.

Away from the courts, we are also seeing a number of broader industry trends.

One such trend has been the significant growth in private credit market in advanced economies, which has provided the potential to offer new solutions in complex restructuring and insolvency matters. This growth has sparked greater competition among lenders eager to maximise returns and explore creative means for unlocking funding opportunities for high-risk distressed businesses. Some commentators worry about whether the sheer quantity of private credit could pose a systemic threat and a couple of recent cases, First Brands in the US and the MFS Group in the UK, have perhaps taken the shine off this market a little.

After years of growth in ESG-linked investments – tied to the focus on net-zero emissions – the “greenlash” against such investments has been a noticeable trend more recently. Governments, financiers and investors are now turning away from a sustainability focus. This has placed the green economy under greater pressure, leading to an uptick in insolvency filings from clean energy and solar companies such as Sunnova, Pine Gate Renewables, Solar Mosaic and Meyer Burger – which all filed for Chapter 11 in 2025. Could 2026 be the year that the green market goes from boom to bust?

Elsewhere, AI is continuing to transform insolvency practice. Apart from automating routine, time-consuming tasks, AI is now providing practitioners with more data-driven, informed decision-making capability. It is also being used in asset tracing and recovery efforts, working with blockchain analysis to track funds across decentralised finance platforms and detect irregularities in multiple accounts and jurisdictions.

The cross-border insolvency framework also continues to evolve at pace. Malaysia adopted the Model Law in July 2025, which has given renewed impetus towards further adoption throughout Asia. UNCITRAL’s draft Model Law on Applicable Law in Insolvency Proceedings is also expected to be finalised in 2026 and could lead to greater convergence in substantive insolvency laws in the coming years.

Given the ongoing economic difficulties and the proven link between effective insolvency systems and economic stability and growth, continuing the momentum on insolvency law reform remains crucial.

In 2026, the restructuring and insolvency industry will continue to evolve and there remains a great opportunity for insolvency practitioners to shape future reform and make a real contribution to supporting businesses, jobs, local communities and regional economies.