Vol 17 (2020) - Issue 2

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Syncreon: Using an English Scheme to Restructure Debt of a US-Based Enterprise

Synopsis

In October 2019, Syncreon Group BV and Syncreon Automotive UK Limited (together with their affiliates and subsidiaries, 'Syncreon' or the 'Company') completed a restructuring that is believed to be the first that used English schemes of arrangement (the 'Schemes' to restructure approximately $1.1 billion of debt issued by a US-based company. The Schemes were coupled with recognitions in the US under Chapter 15 and in Canada under the Canadian Companies' Creditors Arrangement Act ('CCAA'), which also appears to be the first recognition of an English scheme under the CCAA. To establish sufficient connection with the English jurisdiction, Syncreon amended the governing law of the credit facility and its notes from New York law to English law and submitted to the jurisdiction of the courts of England and Wales ahead of the restructuring.

This strategy may become a model for other US companies seeking to use the English courts and statutory provisions to restructure their financial liabilities as an alternative to US Chapter 11 proceedings – it remains to be seen, however, if the result would have been the same if there were significant objections and the creditor support were not as overwhelming.