The recent decision in Re Astora Women’s Health LLC illustrates the importance of cross-border recognition of insolvency processes, highlighting the benefits of a joined-up global approach which recognises that modern business do not stop for international borders.

With Astora hot off the presses and the twenty-fifth anniversary of the UNCITRAL Model Law on the horizon the team at SPB have taken stock of the cross-border recognition framework from the perspective of the UK and the US.


On 27 September Judge Burton considered an application brought by Mark Bradley, the company’s chief financial officer, for recognition of the proceedings under Chapter 11 of Title 11 (the “Bankruptcy Code”) in respect of Astora Women’s Health LLC (“Astora”). Judge Burton granted the order.

Astora is a Delaware limited liability company, operated and managed from Delaware which has ceased trading but is subject to over 30,000 litigation claims as a result of its manufacture of surgical mesh products. Most of the claimants in the litigation are in the US, however 13 claims have been brought in England and Wales, and a further 56 claims have been brought in Scotland (the “UK Claims”). Astora, and other members of its group, filed bankruptcy proceedings under Chapter 11 of the Bankruptcy Code (the “Chapter 11 Proceedings”) in the Southern District of New York. Mr. Bradley sought recognition of the Chapter 11 Proceedings in order to stay the UK Claims and require the claimants to pursue their claims against Astora in the Chapter 11 Proceedings.

In considering Mr. Bradley’s application Judge Burton set out the legal principles underpinning the Cross Border Insolvency Regulations 2006 (the “CBIR”) under which recognition had been sought. The CBIR were introduced pursuant to section 14 of the Insolvency Act 2000 in order to give effect, in Great Britain, to UNCITRAL’s Model Law on Cross Border Insolvency (the “Model Law”). In order to obtain a recognition order under the CBIR it must be demonstrated that:

  • the foreign proceedings are “foreign proceedings” within the meaning of the Model Law.
  • the applicant is a “foreign representative” for the purposes of the Model Law.
  • for recognition as “foreign main proceedings”, and the accompanying stay against proceedings, it must be demonstrated that the foreign proceedings are opened where the debtor has its centre of main interests (“COMI”); and
  • there are no public policy reasons why the recognition should not be granted.

An order issued by the United States Bankruptcy Judge in the Chapter 11 Proceedings stating (amongst other things) that Mr. Bradley is authorised to act as a foreign representative in the UK and seeking the “aid and assistance” of the UK Court to recognise the Chapter 11 Proceedings pursuant to the CBIR was placed before the UK Court (the “US Order”). Although other evidence was put to the UK Court demonstrating more fully “from first principals” that the Chapter 11 Proceedings were “foreign proceedings” it was the Judge’s view that the US Order was sufficient evidence to oblige the UK Court to recognise the Chapter 11 Proceedings, subject to considerations around public policy.

There being no assets within England, Wales or Scotland which the claimants in the UK Claims could hope to benefit from, it was found that there was no public policy reason which should prevent the UK Court from granting the recognition order.

This approach is incredibly helpful in easing the evidential burden that may be faced by future applicants seeking recognition of US bankruptcy proceedings as it has provided precedent that a carefully worded order from the US courts should be sufficient evidence to support recognition under the CBIR. Although it may be expected that applicants will still proceed with caution and continue to present full evidence to the court, this decision opens the door to a more streamlined process.

The view from the UK

As Astora demonstrates, the Model Law (as implemented in the UK) provides an excellent tool for facilitating international cooperation leading to greater efficiency and cost-savings that can increase returns for creditors. This type of easy coordination may also assist insolvent debtors with international creditors to trade out of difficulties and continue as going concerns in due course.

The easy and well-trodden path to recognition of Chapter 11 proceedings demonstrates the effectiveness of the Model Law and what a useful and powerful tool it can be. In the post-Brexit landscape, where recognition of UK restructuring regimes across Europe is reliant on a patchwork of international treaties, European legislation, domestic legislation and common law, it would be welcome to see a wider uptake of the Model Law across European jurisdictions in order to enhance consistency, coordination and predictability in the European restructuring landscape.

The view from the US

The US Order specifically provided the following key language,

The Court requests the aid and assistance of the UK Court to recognize the Chapter 11 Cases as a “foreign main proceeding” or “foreign non-main proceeding,” as applicable, and Mr. Mark Bradley as a “foreign representative” pursuant to the CBIR, and to recognize and give full force and effect to this Order and any other orders for which recognition is sought throughout the UK.

Motions seeking this type of relief are not novel in the US Bankruptcy Courts and are becoming more routine as larger bankruptcy cases are filed in the US that implicate cross border assets and/or claims. 

Companies with foreign assets and/or liabilities contemplating filing Chapter 11 should take note of this decision and consider whether to seek a similar motion from the US Court if it might be necessary to seek recognition of the Chapter 11 abroad.  As this case demonstrates, the UK court was willing to assist, and the existence of the US Order helped persuade the UK court that the requirements of the CBIR were easily met.