• Irish restructuring regime used in high-profile international cases
• Case law illustrates utility of Irish tools as main or ‘bolt-on’ processes
• Potential for synergies with US and UK processes

Opportunities for Irish restructuring lawyers to capitalise on the shifting post-Brexit landscape and promote Ireland as an international restructuring hub had already emerged in the pre-pandemic years. The Irish were aided in their campaign by high-profile cases such as Ballantyne Re – which endorsed the Irish scheme’s potential – and Asia Pulp and Paper’s innovative use of the Irish system.

Fast forward to 2026, and further significant cases, including Mallinckrodt, Endo, Nordic Aviation Capital, Norwegian Air and Celtic Roads (Waterford) continue to fly the flag for Ireland, highlighting the utility of Irish restructuring tools – either alone or in tandem with other international processes such as US Chapter 11 proceedings.

In the first of a two-part report, Debtwire’s legal analyst team recaps the fundamentals of the Irish restructuring system, touches on some key cross-border cases, and considers what is working well, while also highlighting criticisms of the regime.

In Part 2, we will look at future reform, including that mandated by the latest EU insolvency directive and litigation, and also touch on liability management exercises (LMEs) in Ireland.

Irish options 

Two key Irish restructuring tools are the scheme of arrangement and examinership.

Like the UK, Ireland has a flexible scheme of arrangement (the Part 9 scheme) which enables a debtor company to reach a compromise or arrangement with creditors or members. Schemes require approval by a majority in number and 75% in value of each class voting, plus court sanction.

The Irish scheme is highly comparable to the UK scheme, with the legislation governing the Irish process (the Irish Companies Act 2014 (Part 9)) bearing similarities to the UK provisions (under Part 26 of the Companies Act 2006). As such, the Irish court may refer to English legal authorities, among others. Like the UK scheme, the Irish procedure extends to foreign companies with a ‘sufficient connection’ to Ireland. Schemes have received recognition in the EU under the Brussels Regulation and in the US via a Chapter 15 proceeding.

Notably, Irish practitioners have another – Ireland-specific – scheme tool in their armoury: the ‘Part 11’ scheme of arrangement. This relates to companies facing, or in the process of, winding up. While this process needs the approval of 75% (in number and value) of creditors, there is – significantly – no class division or court scrutiny (although there is an appeal process available). Although this process is not commonly used, Asia Pulp and Paper provides an interesting example.

Ireland also boasts an examinership process. Examinership, which bears similarities to US Chapter 11 proceedings, provides distressed companies deemed to have a reasonable chance of survival with an automatic moratorium on creditor action while a restructuring plan is drawn up. Facilitating cross-class cram downs with a 50.01% threshold (in value and number of those present and voting of one in-the-money impaired class), the process is available to a debtor with its centre of main interest (COMI) or an “establishment” in Ireland, or any company incorporated in Ireland but with its COMI outside the EU. Significantly, examinership is automatically recognised in the EU under the European Insolvency Regulation. They have also received US recognition under Chapter 15 and in the UK under the Insolvency Act.

In some cross-border workout situations involving Irish companies, e.g. Mallinckrodt (discussed below), it can be necessary to use an examinership as part of a multi-pronged approach, along with other global restructuring tools, such as US Chapter 11 proceedings.

A parallel Irish process may be desirable for simplicity of recognition in the country, given that – unlike the US and the UK – Ireland has not incorporated the UNCITRAL Model Law on Cross-Border Insolvency into its domestic law, meaning that any application to recognise a Chapter 11 plan in Ireland would need to be made under common law principles rather than the streamlined procedure implemented through the Model Law.

In 2022, the Irish Companies Act was amended to implement the EU Restructuring Directive. While the Irish system was already largely compliant with the Directive and the Irish reforms were less drastic than those seen in other jurisdictions, the reforms included codifying director’s duties in distressed scenarios, and certain changes to the examinership regime including the introduction of a ‘best interests of creditors’ test.

International reach 

As well as Mallinckrodt’s examinership, Stephen Ahern, a Partner at A&L Goodbody in Dublin, highlights Endo International’s 2024 scheme as the most significant recent case to showcase the utility of the Irish restructuring toolkit. Ahern explains that the Endo restructuring is notable as it showed that a single Irish parent can deliver EU-wide releases for an entire group of 75+ companies without any subsidiary filing in Ireland. Ahern and his team advised Endo on the deal, having also advised on many other high-profile cases including Norwegian Air Shuttle, Nordic Aviation and Ambac.

Endo is a US pharmaceuticals company headquartered in Ireland that filed for Chapter 11 in August 2022 to restructure over USD 8.1bn in debt, partly due to a wave of opioid-related litigations.

Following more than a year of negotiations, a Chapter 11 plan was put forward for confirmation in New York. To implement the plan in Ireland and to ensure that the debtor companies and various parties benefited from the release of claims across Ireland and the EU, Endo filed a parallel Part 9 scheme in the Irish High Court.

“The Irish scheme was novel in that it functioned as a recognition and enforcement proceeding – the Irish High Court approved certain provisions of the US plan and various non-consensual third-party releases for the parent scheme debtor and all of its affiliates in Ireland and, by virtue of the Brussels Regulation, across the EU,” Ahern explained.

The scheme incorporated broad releases, including debtor releases (irrevocable releases of claims against all debtors, their estates, and post-emergence entities) and exculpation releases (covering the debtors, the creditors’ committee, the opioid claimants’ committee, certain trusts, the prepetition secured parties and their respective advisors).

Critically, only the Irish parent filed in Ireland – none of the 75+ Chapter 11 debtor affiliates were debtors in respect of the Irish scheme. The parent used an Irish law-governed deed poll of indemnity and contribution (authorised by the US Bankruptcy Court) to guarantee the liabilities of all other debtors, thereby establishing their creditors as scheme creditors of the parent and obviating the need for each subsidiary to independently establish a “sufficient connection” to Ireland. The Irish High Court accepted that there were “strong commercial reasons” making this approach appropriate.

“The Irish scheme solicitation and voting was completed as part of the US plan process with no separate Irish solicitation — the US plan ballots provided that votes solicited through the US process would simultaneously count as votes on the Irish scheme,” Ahern explained, adding that the scheme circular was just 69 pages and was almost entirely referential to the 200+ page US plan, demonstrating the efficiency of the bolt-on approach.

Despite having different legal tests for sanction compared to Chapter 11 confirmation, the Irish High Court was comfortable with the joint approach and independently confirmed that the requirements of the Irish Companies Act 2014 had been satisfied.

“The Endo case marked a significant evolution in the use of Irish proceedings, demonstrating that a Part 9 scheme can be used for restructurings involving mass tort claims, to extend the reach of a US Chapter 11 plan into Ireland and across the EU. It’s clear that the Irish scheme can provide a streamlined, cost-efficient process for multinational corporations requiring cross-jurisdictional recognition and enforcement of third-party releases,” concluded Ahern.

For Burke Legal’s Kathlene Burke – a staunch proponent of the Irish system, whose name also features on the advisory mandate in Endo – Endo is “by far the most interesting” recent development. “This is the blueprint for EU recognition under the Brussels Regulation,” Burke tells Debtwire, adding that “while the classes didn’t match, the debtors didn’t match and the plan was all of 9 pages, it did get the third-party releases.”

Meanwhile, in Mallinckrodt’s case, where his firm A&L Goodbody acted for the Examiner, Ahern explained that “examinership remained the only reliable way to cancel and reissue equity in an Irish parent – something Chapter 11 simply cannot do.”

Mallinckrodt plc is the Irish-incorporated ultimate parent of a global specialty pharmaceuticals group. The group first accessed Irish examinership in 2020, alongside a US Chapter 11, to resolve opioid and Acthar Gel liabilities and restructure approximately USD 5.3bn of funded debt. Ahern explains that the examinership was needed specifically because a Chapter 11 cannot, on its own, cancel and reissue equity in an Irish parent.

When the group faced bankruptcy again in 2023, it filed a second Chapter 11, this time with USD 3.6bn in debt, and petitioned for a second Irish examinership. This again demonstrated the utility of the process as a bolt-on to a US restructuring where the group’s parent is Irish-incorporated. “Examinerships offer Chapter 11-like protections and cross-class cram down at a bare-majority approval,” Burke explained.

The examiner’s scheme cancelled all existing shares for no consideration, introduced a new constitution with bespoke governance provisions, and issued reorganised equity to creditors — first and second lien creditors received 92.3% and 7.7% respectively. “A US Chapter 11 cannot effect these steps in respect of an Irish-incorporated company,” stated Ahern.

The scheme included Irish law releases and discharges mirroring the US plan releases, giving those releases effectiveness in Ireland and (by virtue of the European Insolvency Regulation) across the EU.

After the plan was filed, in 2024, non-consensual third-party releases in the Chapter 11 proceeding were substantially narrowed by the Harrington v. Purdue Pharma decision (June 2024).

The Irish scheme was designed to come into effect simultaneously with the Chapter 11 plan. The court confirmed the scheme in advance of conditions precedent being satisfied, on the basis that the cancellation of shares, introduction of the new constitution, and other relevant steps would take effect simultaneously on the effective date of the Chapter 11 plan.

Ahern explains that the examinership operated as a ‘bolt-on’ to the US process. “The examiner formulated proposals that gave effect to what had already been negotiated in the Chapter 11. Of the 626 impaired creditors and members who participated in the vote, only one small creditor voted against,” he added.

Unlike a Part 9 scheme, examinership permits cross-class cram down. The court confirmed the scheme notwithstanding two inquorate classes, applying the three alternative voting thresholds introduced by the 2022 EU Restructuring Directive implementing regulations (2022 Regulations) — all three of which were satisfied.

The Irish High Court’s Mr Justice Michael Quinn confirmed the scheme, navigating several novel issues under the 2022 Regulations — including the best-interests-of-creditors test, class composition principles, and the three alternative voting thresholds — all in its first significant judicial consideration of the 2022 reforms. “The case confirmed the continued utility of Irish examinership as a cost-efficient, predictable tool for implementing aspects of a US Chapter 11 plan under Irish law — particularly where equity in an Irish parent needs to be dealt with,” concluded Ahern.

Finally, Burke highlighted Barclays, a part 9 scheme to drop down and sell a part of the business (non-distressed) as an interesting development, illustrating the flexibility of the Irish scheme in a cross-border context.

EU gateway 

A key theme emerging from the above discussion is the use of Irish procedures for cross-border recognition.

Following Brexit, UK proceedings no longer benefit from automatic recognition throughout the EU. Burke explains that Ireland is now the only common law jurisdiction in the EU offering UK and US counsel a familiar legal environment with full EU enforcement. Irish proceedings can also bind English creditors via a section 426 Insolvency Act application and US creditors under Chapter 15 which would mean less execution risk than using other parallel EU proceedings.

In practice, a UK restructuring plan – or scheme – or a US Chapter 11 plan leads, with UK/US counsel leading the process. An Irish Part 9 scheme or examinership mirrors or incorporates the UK/US proceedings. The Irish process is automatically recognised EU-wide under either the European Insolvency Regulation or Brussels Regulation.

Alternatively, Burke describes how the Irish process could be the lead process, benefitting from automatic recognition throughout the EU, with UK recognition via section 426 for examinership or schemes under the Hague Judgments Convention and US recognition under Chapter 15.

Burke explains that Hague 2019 should make Irish schemes effective in the UK through registration. “It also makes English schemes effective in the EU, but UK judgments would need to be registered in all relevant member states, whereas Irish schemes benefit from the Brussels Regulation and only need registration in the UK. That should mean that Ireland can get over the Rule in Gibbs no matter what process is done (scheme or examinership),” she added.

“Ireland has the potential to be a way for the UK to backdoor into EU proceedings. The parallel procedures used in Endo with US Chapter 11s are particularly suited to UK proceedings, given the similarity between Part 9 schemes and English RPs. This should be more fully explored,” Burke concluded.

Pros and cons 

Turning to consider what is working well with Irish restructuring tools, Ahern observes that Ireland is a “pro-release” jurisdiction, explaining that the Irish courts have interpreted “compromise or arrangement” under Part 9 broadly enough to encompass non-consensual third-party releases ancillary to the primary creditor compromise.

“That judicial approach, established in the Ballantyne Re and Nordic Aviation Capital judgments, has taken on particular significance in the wake of Purdue. US companies are increasingly looking to foreign jurisdictions that permit such releases and can deliver them through a court-supervised process capable of Chapter 15 recognition,” Ahern said, adding that Ireland’s established pro-release case law, combined with its track record of Chapter 15 recognition (Ballantyne Re, Nordic, Lighthouse Pacific), means it can offer exactly that – a tested pathway for obtaining and enforcing third-party releases that are no longer achievable domestically in the US.

For Ahern, a further perk of the Irish system is its speed, priority and predictability. Ahern points to Ballantyne Re, Nordic, and Celtic Roads (Waterford) Part 9 schemes in which the period between convening hearing and sanction hearing was just 37, 42, and 23 days respectively. “The Irish High Court has consistently demonstrated a willingness to case-manage scheme processes on compressed timelines driven by commercial necessity,” he concluded.

Burke pointed to the “quite powerful” automatic stay and absence of creditors’ committee, which keeps costs down, along with a 50.01% cram down threshold (in examinerships) – the lowest in Europe. “There is also the ability to use a Part 9 scheme with a higher consent threshold, but the ability to get third party releases,” she notes, adding that the courts are also fairly flexible with COMI and seem welcoming to foreign restructurings (as was seen in the Mac Interiors case).

Turning to criticisms of Irish tools or areas for improvement, Ahern points out that the absence of a formal statutory DIP financing framework (comparable to section 364 of the US Bankruptcy Code, which gives DIP lenders super-priority status) has historically been cited as a possible gap in Ireland’s examinership process. Ahern elaborates that while the existing certification mechanism under the Companies Act allows an examiner to seek court approval for priority funding, the priority conferred is limited (ranking ahead of floating charges and unsecured debt, but not fixed charges), and the mechanism has not been widely employed in practice.

In addition, this gap is mitigated by the compressed timelines of examinership (70-100 days), which often reduce the need for interim funding (compared to a typically much longer-running Chapter 11); the fact that the company’s revenue streams continue during the process; and the fact that, in cross-border cases running alongside Chapter 11 (such as Mallinckrodt and Endo), DIP financing is typically sourced through the US process.

While Burke observes that the time limit for examinership is often seen as a limitation, it can be said that this focuses the mind. “The examiner’s involvement is seen as a con when compared with a UK restructuring plan or Chapter 11,” she said, explaining that many think the examiner is a trustee that displaces the debtor, but it’s more like a CRO, (with a duty owed to the court) that helps the debtor put forward the plan (and is often chosen by the debtor).

This report will be continued in Part 2, which will consider future reform and LMEs.