Listed US company sidesteps Chapter 11 with UK Part 26A workaround

The United States Bankruptcy Court for the Southern District of Texas has granted Chapter 15 recognition to Fossil Group Inc.’s UK restructuring plan, marking the first time a US-listed company has successfully used a Part 26A Companies Act scheme to overhaul its debt and obtain cross-border enforcement protection.

The 12 November order gives effect in the US to the restructuring plan sanctioned two days earlier by the High Court of Justice in London. The plan (which we previously wrote about here), advanced through Fossil’s UK subsidiary, Fossil (UK) Global Services Ltd, restructures approximately $150 million in 7.00% senior notes due 2026, exchanging them for longer-dated secured instruments and paving the way for the company to distribute new securities within days.

The recognition caps a tightly coordinated trans-Atlantic strategy that allowed the Texas-based watchmaker—whose brands include Fossil, Skagen, and Zodiac—to avoid a Chapter 11 filing while preserving its Nasdaq listing. The company had shifted the governing law of its notes from New York to England and created the UK entity to anchor jurisdiction for the plan after a prior out-of-court exchange offer fell short of the 90% US consent threshold.

By employing the UK’s flexible Part 26A mechanism, Fossil sidestepped the rigid “absolute priority” rule that would have likely wiped out shareholders in a domestic US filing. Under English law, equity can be retained if the plan is found to be fair and the valuation evidence credible, an attractive feature for cross-border issuers seeking targeted restructurings without full insolvency proceedings.

The dual-court approvals effectively validate the company’s novel approach and signal growing US judicial comfort with UK restructuring frameworks as complementary tools rather than competitors to Chapter 11. Fossil was advised by Weil Gotshal & Manges as US counsel and Evercore as financial advisor.