The UK and the US have established a way of dealing with transatlantic restructurings. But change is in the air. Given the adoption of the United Nations Commission on International Trade Law (UNCITRAL) model on cross-border insolvency law in both jurisdictions and the recent liberality of the Privy Council in the Navigator case, will our established way of doing things become obsolete? I think not.

In the opening years of this millennium, we have seen a clutch of highly successful bi-jurisdictional restructurings involving the US and the UK (or other common-law jurisdictions that have inherited their jurisprudence from the UK). The finest examples of parallel procedures in operation are, perhaps, the Global Crossing restructuring (Bermuda/US) and the epic five-year restructuring of the huge Federal Mogul group of companies (US/UK). Painfully slow, hideously expensive (particularly at the US end), fraught with conflict, but ultimately successful, the parallel procedures model has delivered results in the hardest of cases.

However, the difficulties should not be underestimated. The bedrock of the integrated approach is the Chapter 11 process under the US Federal Bankruptcy Code. That process does not fit easily with the UK's administration procedure. The role of the US debtor in possession is irreconcilable with the interventionist role of a UK administrator. Creditor committees in the two jurisdictions are scarcely identifiable as the same animal; the national courts operate in completely different ways. Our (not quite) common language becomes an instrument of division – the fog of mutual miscomprehension can occasionally take quite some time to clear.

But, for all the problems, the model works. We achieve a cumulative stay on creditor action throughout the US, the UK and (courtesy of the European Insolvency Regulation) the greater part of continental Europe. We establish techniques for transatlantic communications between courts. We find ways of discharging the duties of an administrator without displacing the powers and day-to-day control of the management. By approaching the procedures in an enterprising manner, we find ways of compromising and adapting, fighting when we must, but agreeing whenever we can. The dual process is suited to the largest and most complex of cases. The path may be twisted and thorny, but the end result is most certainly vaut le voyage.

There have, however, been recent changes. The UNCITRAL model law was adopted by the US as Chapter 15 to the Bankruptcy Code in 2005. By the Cross Border Insolvency Regulations 2006, it passed into English law in April 2006. The fundamentals of the model law are the recognition of foreign representatives and the provision of assistance to them by the courts of the adopting country. Issues will arise between the US and the UK. Will the UK courts recognise the Chapter 11 debtor-in-possession as a foreign representative, even when the companies that have filed for Chapter 11 protection are based outside the US – an increasingly common phenomenon? I think they will, but the issue will be far from straightforward. Can recognition here confer the same protection against creditor action as parallel plenary proceedings?

The decision of the Privy Council in the Navigator case, Cambridge Gas Transport Corporation v The Official Committee of Unsecured Creditors (of Navigator Holdings and Others), delivered in May 2006, raises still further questions. There, the Privy Council decided that the Manx courts could give effect to a confirmed US plan of reorganisation by directing the registration in the Isle of Man (IOM) of an involuntary share transfer.

Remarkably, Lord Hoffman managed to deliver the judgment of the court without once mentioning the word 'comity', even though comity was the cornerstone of the judicial approach. No parallel procedure was required to ensure implementation of the compromise embodied in the plan. On the face of it, the court appeared to be unveiling an approach even more liberal than the model law – no formal recognition process and an unrestricted discretion in the court to exercise its fullest powers to assist the reorganisation process of a foreign court.

Both of these developments move us forward, extending in a flexible manner our ability to handle cross-border business in an economic and harmonious manner. They will not, however, supersede (even though they may reduce) the use of parallel plenary proceedings in complex cases. I say this for three reasons.

In many transatlantic cases, the UK group members either operate across, and have assets in, several European jurisdictions or provide the gateway to Europe through local subsidiaries operating there. Under the European Insolvency Regulation, a UK administration will automatically be recognised and given effect in the EC. For example, the stay on creditor action under the Insolvency Act takes effect and can be enforced immediately throughout the EC. The same consequences will not flow from the recognition by the UK court of a foreign representative or the exercise of its powers at his request, unless the court is requested to open full administration or liquidation proceedings in the UK (in which case we will be back to the parallel plenary proceedings model).

UK practitioners have pioneered the use of the UK administration procedure for companies registered and operating elsewhere in the EC to achieve group restructurings in a single centre. It will not be possible to replicate the benefits of such group appointments in the UK under the model law short of a request by the foreign representative for the commencement of full administration proceedings.

Plenary proceedings will still be appropriate in cases where the restructuring is to be delivered by a compromise that must be effective in both jurisdictions. The English court cannot renounce its responsibility to determine the fairness of a compromise intended to bind creditors or other parties in the UK.

This appears clearly from the many judicial pronouncements in the Federal Mogul case (under the name T&N). In the Navigator case, there was no parallel compromise procedure. The case was unusual, there being no businesses or material assets in the IOM. The Privy Council was clearly satisfied about the fairness of the requirement to transfer the relevant shares; had it not been so satisfied, it would have held that the assistance requested by the US court should be refused.

Where there are businesses, assets and creditors in the UK, the question of fairness is likely to be much more involved. It would be a high-risk strategy to confirm a plan of reorganisation in the US and then, at the very end of the process, rely upon the UK court accepting the fundamental fairness of the compromise, possibly in the face of spirited local resistance. It is wiser by far to use parallel plenary procedures to ensure that, with effective protection against creditor action, the ultimate compromise can be developed in harness, ensuring acceptability to all creditor groups and that local standards of fairness are satisfied in both jurisdictions.

Finally, the UK's insolvency procedures embody effective creditor protection measures and impose duties on the officeholder to ensure that the job is done prop-erly: insolvency appointees must report on the conduct of directors, they must report to creditors on progress, they must observe stringent regulatory requirements. The procedures include well-recognised checks and balances permitting challenges by parties claiming to be prejudiced by the actions of insolvency officeholders. It will, in practical terms, be best to use tried and tested procedures where there are material assets and creditors in the UK rather than attempting, through the exercise of the court's powers under the model law, to create customised processes for individual cases.

In short, the recent developments in the UK and the US are to be welcomed. In the largest and most difficult cases, however, there will still be a place for full parallel procedures.

Mark Andrews is head of reconstruction and insolvency at Denton Wilde Sapte.