Geopolitical shock rarely stays local. The Iran War is amplifying energy, shipping, supply‑chain and sanctions risks, pushing more corporate groups into distress, in the process forcing UK businesses to navigate restructurings and insolvencies across multiple legal systems at once.
No matter how soon or otherwise and exactly through which concessions the conflict is resolved, the damage to the global and many local economies is already done. The longer final agreement and implementation of the agreed solutions are delayed, the worse the repercussions for businesses worldwide will be.
Why the Iran War increases restructuring risk for UK businesses
For many UK companies, the immediate issue is not direct operations in the conflict zone; it’s the way geopolitical conflict transmits into their balance sheets. War conditions can create a compound shock: higher and more volatile energy inputs, disrupted transport routes and insurance markets, wider bid‑ask spreads in FX and commodities, and tighter credit conditions. The result is a familiar cash crisis restructuring pattern, starting with liquidity stress, then covenant pressure, then a scramble for waivers, additional collateral and emergency funding.
Sectors with high exposure to energy costs (manufacturing, chemicals, transport), long supply chains (retail, automotive, electronics) and shipping choke points are especially vulnerable. Even businesses that remain profitable on paper can be caught out by working‑capital spirals: longer transit times, larger inventory buffers, higher letters‑of‑credit requirements, and customers demanding extended settlement terms. Against that backdrop, corporate groups will increasingly look for coordinated solutions that bind creditors across borders. These are the defining feature of a modern multi‑jurisdictional restructuring.
Why multi-jurisdictional restructurings are likely to rise
Even mid‑market UK businesses can become ‘international’ in insolvency terms. There may be overseas subsidiaries that hold trading contracts; IP licensed through an EU entity; cash swept to a treasury company in another jurisdiction; inventory held in third‑party warehouses abroad; or lenders and bondholders located globally. In a distress scenario, each of those touchpoints can pull the restructuring into a different forum, sometimes with conflicting objectives and timelines.
Post-Brexit cross-border insolvency: What UK businesses need to know
The essential tool for successful cross-border restructuring is having insolvency office holders such as UK Administrators or Liquidators, or their foreign equivalents recognised and assisted under legal regimes in other jurisdictions. We previously examined in detail how this works in practice.
Unfortunately, Brexit changed the recognition map for UK‑EU cases. Proceedings opened in the UK after the end of the transition period are no longer automatically recognised across EU member states. Instead, UK insolvency office holders and companies must rely on each member state’s domestic rules. The UK Government’s own guidance highlights that this shift increases court scrutiny, time and uncertainty for cross‑border enforcement between the UK and EU, and the reality that approaches vary widely by jurisdiction.
For purely contractual restructurings, English schemes of arrangement and Part 26A restructuring plans can still be highly effective, especially where finance documents are governed by English law. But cross‑border execution hinges on recognition and enforceability in the jurisdictions where creditors might sue or enforce.
Cross-Border insolvency risks for UK businesses following the iran war
Shipping, insurance and supply‑chain disruption
War risk premia can change the economics of trade overnight: vessels are rerouted, lead times extend, demurrage and detention costs rise, and insurers impose exclusions or higher deductibles. For businesses using inventory financing, letters of credit or receivables facilities, these shifts can reduce borrowing bases and force margin calls. Insolvency issues can then become cross‑border because goods in transit, bonded warehouses and third‑party logistics hubs sit under different laws, each with their own security, lien and retention‑of‑title rules. A restructuring must map where the assets physically are, not just where they appear on the balance sheet.
Energy and commodity volatility: hedges, margining and close‑out
Spikes in energy and commodity prices can create immediate liquidity drains through margin calls on hedging and trading positions. These exposures are often documented under standardised master agreements with close‑out netting and set‑off provisions. In distress, the timing of a filing, the scope of any moratorium, and the recognition of netting rights can vary across jurisdictions. This raises the risk that a counterparty closes out in one forum while the group is seeking protection in another. UK boards and treasury teams should treat hedging collateral and margining as a core restructuring workstream, not a footnote.
Disputes escalation: arbitration, judgments and enforcement races
Distress often turns commercial tension into formal disputes. Where contracts specify arbitration or foreign courts, a UK insolvency or restructuring process may not automatically prevent proceedings elsewhere. That creates a risk of ‘grab‑and‑run’ enforcement against overseas assets. While the UK has well‑developed tools for managing the interaction between insolvency and arbitration, businesses should assume cross‑border fights will need active case management, including agreed standstills, recognition applications and, where appropriate, coordinated orders between courts.
A practical playbook for UK boards and finance teams
Map the group and the enforcement hotspots
List entities, assets, bank accounts, key contracts and security packages by jurisdiction; identify where a hostile creditor could most quickly seize value.
Stress‑test liquidity under disruption scenarios
Model fuel/energy inputs, transport delays, inventory buffers and FX volatility; track covenant and availability headroom daily in crisis mode.
Identify which liabilities must be compromised and under which law
Segment debt and key contracts by governing law (English, New York, EU member state, etc.) and by creditor location.
Choose a lead restructuring route early
Decide whether the centre of gravity is a UK restructuring plan/scheme, a foreign proceeding with UK recognition (CBIR), or an interlocking approach; align milestones, information packs and valuation evidence accordingly.
Plan recognition and parallel steps
For each ‘must‑win’ jurisdiction, confirm the recognition pathway, estimated timeline and likely objections; budget for filings that may be needed to stabilise assets.
Engage critical stakeholders before the tipping point
Lenders, key suppliers, landlords, trade credit insurers, employee representatives and regulators can each derail or de‑risk a plan; sequencing matters.
Prepare a communications strategy and keep it updated
Multi‑jurisdictional cases move fast, so consistent messaging for employees, customers, counterparties and external media is essential, as is constant updating as circumstances change.
Preparing for a more complex cross-border restructuring landscape
The Iran War is likely to accelerate the next cycle of business distress by increasing volatility and operational friction. For UK businesses, the restructuring challenge will often be less about finding a rescue tool and more about executing it across borders in a world where recognition is uncertain, enforcement is opportunistic and legal constraints differ by jurisdiction. The organisations that will manage this best will be those that treat cross‑border ‘plumbing’ as a strategic priority: mapping assets and liabilities, planning recognition routes, and coordinating stakeholders before liquidity pressure turns into a chaotic multi‑forum scramble.
If you are seeking professional advice for your business, Opus is here to help. We can arrange for you to speak to one of our Partners, who can discuss options with you. We have offices nationwide and by contacting us on 0203 995 6380, you will be able to get immediate assistance from our Partner-led team.