Fashion retailer Fossil uses English restructuring plan to avoid US Chapter 11

Quick read

On 10 November 2025 the High Court sanctioned a restructuring plan for Fossil (UK) Global Services Ltd (Fossil), an English subsidiary of Fossil Group, Inc. (FGI) incorporated specifically to use an English restructuring plan.

Background

The plan proposed that noteholders could exchange their existing notes for new notes through an Exchange Offer. Noteholders also had the right to provide 'New Money' as part of the restructuring, with this right being available to both wholesale and retail noteholders.

Fossil argued that the 'relevant alternative' to the restructuring plan would be for FGI to enter US Chapter 11 bankruptcy proceedings and a 'section 363 sale', and for Fossil to be wound up. Using a UK plan rather than Chapter 11 allowed the company to avoid the US 'absolute priority rule' and limit the process to a single class of noteholders.

Decision

Mr Justice Richards sanctioned the plan after it received overwhelming support from creditors with only a single creditor voting against. The judge found that the plan offered better returns than the relevant alternative for all creditors, and that FGI had rigorously market-tested the terms of new financing to ensure fair pricing.

Key takeaways

Cross-border restructuring: This case demonstrates that English restructuring plans can successfully be used to restructure US company debt, provided they don't violate US public policy and are likely to be recognised by US courts.
Retail investor protection: Courts pay special attention when retail investors are involved, ensuring they receive clear information and proper representation – here, a retail advocate was appointed to protect their interests.
New money financing: When plans involve new money opportunities, courts will examine whether terms provide disproportionate benefits to certain creditor groups, even without cross-class cram down.