Fossil Turns to UK Courts in Unprecedented Restructuring to Preserve US Listing

In a move that could reshape cross-border restructuring strategy for US corporates, Fossil Group is pursuing a novel workout through the English courts—using the UK’s Part 26A Companies Act restructuring plan to restructure roughly $150 million (£150 million) in senior unsecured notes and stave off a potential US bankruptcy and delisting.

The Texas-based watchmaker, whose brands include Fossil, Skagen and Zodiac, is seeking to exchange its 7% senior notes due 2026 for longer-dated secured instruments, alongside $32.5 million in new funding. The UK proceeding follows an unsuccessful bond exchange offer that garnered 82.7% support—short of the 90% threshold required under US securities law. Having changed the governing law of its debt from New York to English law, Fossil established a new UK subsidiary, Fossil (UK) Global Services Ltd, to anchor jurisdiction and propose the plan. The company simultaneously filed for Chapter 15 recognition in the US Bankruptcy Court for the Southern District of Texas, seeking to ensure the UK plan is enforceable stateside.

The restructuring marks the first known instance of a US-listed issuer turning to a UK in-court restructuring mechanism to avoid Chapter 11 and preserve its equity listing. By limiting the process to a single class of noteholders, Fossil sidesteps the US “absolute priority rule,” which generally wipes out shareholders when senior creditors are not paid in full. Under the UK regime, shareholders may retain equity provided the court deems the plan fair and supported by credible valuation evidence—a flexibility that has recently attracted foreign debtors.

Fossil’s petition follows years of declining sales and mounting competition from smart-watch rivals such as Apple and Samsung. After recording losses exceeding $100 million and an aborted asset sale in 2023, the company entered a transaction support agreement with major bondholders HG Vora Capital Management and Nantahala Capital Management. Evercore Inc. is advising Fossil as financial advisor, with Weil Gotshal & Manges serving as legal counsel.

The English High Court granted leave on 15 October for Fossil to convene a single creditor meeting on 6 November, rejecting objections from a US retail bondholder who argued that jurisdiction properly lay in the US. Justice Cawson will ultimately decide at the sanction hearing—scheduled for 10 November—whether the plan is fair, whether the forum selection is justified, and whether it should be sanctioned notwithstanding the trans-Atlantic controversy it has sparked.

If approved and recognized under Chapter 15, Fossil’s approach could open the door for other US issuers to use English restructuring tools as a functional alternative to Chapter 11—one that allows targeted debt treatment while preserving shareholder value and public-listing status.

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