The Mechanics of Cross-Border Solvency: How New Fortress Energy Used an English Court to Extinguish $9.6 Billion in Debt

For decades, the United States bankruptcy system has operated under a rigid doctrine known as the absolute priority rule. Enshrined in Chapter 11 of the Bankruptcy Code, the rule dictates a strict hierarchy of repayment: senior creditors must be paid in full before junior creditors receive a dime, and all creditors must be made whole before existing shareholders can retain any equity in the reorganized company. While designed to enforce fairness, this inflexible waterfall often results in the complete wipeout of common equity, turning consensual balance-sheet overhauls into protracted, scorched-earth litigation. But a quiet revolution is reshaping corporate distress. American companies are increasingly bypassing the U.S. bankruptcy courts entirely, crossing the Atlantic to utilize a highly flexible British legal mechanism that allows them to rewrite their capital structures, bind dissenting holdouts, and preserve shareholder value.[3]

The most aggressive and successful deployment of this strategy to date culminated in late June 2026, when New Fortress Energy, a NASDAQ-listed global energy infrastructure group, finalized the restructuring of approximately $9.6 billion in debt. Burdened by looming maturity walls and a complex capital stack governed primarily by New York law, the company faced the prospect of a traditional Chapter 11 filing—a route that likely would have erased its existing shareholders and entangled its diverse international assets in a chaotic court battle. Instead, New Fortress Energy executed what restructuring professionals call the "international two-step," anchoring its financial rescue in the High Court of Justice in London before returning to the United States merely to enforce the result.[1]

The engine of this transatlantic maneuver is Part 26A of the UK Companies Act 2006. Introduced in 2020 during the early months of the pandemic, the Part 26A "Restructuring Plan" was designed to modernize British insolvency law by introducing a "cross-class cramdown" feature similar to U.S. Chapter 11. This feature allows a judge to impose a restructuring on dissenting classes of creditors, provided that at least one "in-the-money" class votes in favor and no creditor is left worse off than they would be in the relevant alternative scenario, such as a liquidation. Crucially, however, the British Parliament deliberately chose not to import the American absolute priority rule into the Part 26A framework.[2]

The absence of the absolute priority rule in the UK gives corporate debtors extraordinary leverage to negotiate creative, value-preserving deals. Because the English court assesses the overall fairness of the plan rather than strictly enforcing a statutory repayment hierarchy, senior creditors can agree to concede a portion of the post-restructuring equity to existing shareholders. For New Fortress Energy, this flexibility was the linchpin of the entire transaction. The company negotiated a comprehensive Restructuring Support Agreement with its major lenders, proposing a surgical split of its global operations that would satisfy debt obligations while keeping the parent company publicly traded on the NASDAQ.[1][3]

Under the terms of the deal, New Fortress Energy agreed to carve out its lucrative Brazilian liquefied natural gas operations into a newly formed, private entity dubbed "BrazilCo." Full ownership and control of BrazilCo were handed over directly to the creditors, effectively erasing billions in liabilities from the parent company's balance sheet. In exchange for this massive asset transfer and a debt-for-equity swap on the remaining obligations, the creditors agreed to leave the existing common shareholders with a 35 percent equity stake in the surviving, publicly traded New Fortress Energy. In a U.S. Chapter 11 proceeding, such a generous carve-out for legacy shareholders while creditors took a haircut would have faced nearly insurmountable legal hurdles.[2]

To access the jurisdiction of the English courts, New Fortress Energy had to establish a "sufficient connection" to the United Kingdom, despite being a Delaware-incorporated company with U.S.-law governed debt. The company achieved this by incorporating two new subsidiaries in England and Wales: NFE Global Holdings Limited and NFE Brazil Newco Limited. The group then shifted the obligations and guarantees of its funded debt into these British entities. While this maneuver is a textbook example of forum shopping, the English judiciary has increasingly embraced the practice. During the sanction hearings, Justice Cawson and Justice Hildyard explicitly endorsed the strategy as "good forum shopping," ruling that the UK venue was chosen legitimately because it produced a superior financial outcome for the creditors compared to a value-destroying liquidation.

The sheer scale of creditor consensus achieved by New Fortress Energy underscores the commercial appeal of the British framework. After eight months of intense negotiations led by financial advisors at Alvarez & Marsal, the company secured signatures from 778 creditors representing roughly 97 percent of the in-scope liabilities. When the formal plan meetings were held in mid-June 2026, the voting results were staggering. Across the seven distinct creditor classes, six voted unanimously in favor of the restructuring plan. The seventh class approved the deal with a 99.84 percent majority. Because the approval was so overwhelming, the English court did not even need to exercise its cross-class cramdown powers, though the threat of that mechanism kept potential holdouts at the negotiating table.[1]

Beyond the preservation of shareholder equity, the UK Restructuring Plan offered New Fortress Energy another critical advantage over U.S. bankruptcy: the availability of broad third-party releases. In complex corporate structures, a restructuring often requires releasing non-debtor affiliates, directors, and officers from future liability to ensure a clean slate. In the United States, the legality of these non-consensual third-party releases has been severely restricted following the Supreme Court's landmark ruling in the Purdue Pharma bankruptcy. The English courts, however, operate under a different standard, permitting third-party releases if they are deemed strictly "necessary to give effect to the arrangement." The High Court approved New Fortress Energy's releases, shielding the broader corporate group from residual litigation.[3]

With the English court's sanction order in hand, New Fortress Energy initiated the second phase of the international two-step. The company's UK subsidiaries filed petitions in the U.S. Bankruptcy Court for the Southern District of New York under Chapter 15 of the Bankruptcy Code. Unlike Chapter 11, which is a plenary reorganization process, Chapter 15 is an ancillary proceeding designed specifically to recognize and enforce foreign insolvency orders. By bringing the fully baked, court-approved British plan to New York, New Fortress Energy effectively asked the U.S. judge to recognize the English proceedings as the "foreign main proceedings" and grant the restructuring full legal force under American law.

On June 26, 2026, U.S. Bankruptcy Judge Martin Glenn granted the Chapter 15 recognition, cementing the erasure of the debt and the implementation of the corporate split. The U.S. court's willingness to enforce a British restructuring that explicitly violates the American absolute priority rule highlights a fascinating tension in cross-border insolvency law. Under Chapter 15, U.S. courts will generally recognize foreign proceedings as long as they do not "manifestly" violate American public policy. Because the New Fortress Energy deal was overwhelmingly consensual and provided a better return to creditors than a liquidation, the U.S. court deferred to the English judgment, allowing the transatlantic arbitrage to succeed.

The successful restructuring of New Fortress Energy is not an isolated anomaly, but rather the maturation of a trend that is rapidly altering the global restructuring landscape. The company follows in the footsteps of other U.S.-listed entities, such as Fossil Group and Argo Blockchain, which have similarly utilized the UK Part 26A process to restructure American debt while maintaining their public listings. Legal analysts note that the British framework is moving past its initial experimental phase and is now viewed as a robust, predictable, and highly strategic alternative for multinational corporations facing distress.

For the broader financial markets, the mechanics of this cross-border solvency strategy offer a profound lesson in regulatory competition. As U.S. bankruptcy courts become increasingly bogged down by rigid statutory interpretations, exorbitant professional fees, and aggressive litigation from distressed-debt funds, London is actively positioning itself as the restructuring capital of the world. By offering a pragmatic, commercially driven venue where debt can be surgically excised and viable businesses preserved without unnecessary destruction of equity, the English courts are providing a vital pressure valve for the global economy. For New Fortress Energy, the result is a revitalized balance sheet, a protected shareholder base, and a clear path forward in the energy transition.[1][3]