Schemes of Arrangement: Irish court-sanctioned $1.65bn cross border restructuring recognised by US Bankruptcy Court

The recent ex tempore judgment of Mr Justice Barniville delivered June 6, 2019 in Re Ballantyne Re plc confirms the Irish High Court’s jurisdiction to sanction a scheme of arrangement between a company and its creditors that provides for the release of third parties pursuant to Part 9 of the Companies Act 2014 (the “Act”).

In reaching his decision, Mr Justice Barniville expressly approved of recent scheme case law in other common law jurisdictions, including the recent decision of the Grand Court of the Cayman Islands in Re Ocean Rig UDW Inc (“Ocean Rig”).

Furthermore, it was a pre-condition to the implementation of the restructuring (envisaged by the scheme) that the scheme be recognised as a foreign main proceeding under Chapter 15 of the US Bankruptcy Code and United States Bankruptcy Court for the Southern District of New York granted a Recognition Order in respect of the Irish scheme of arrangement on June 12, 2019.

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