CHAPTER 41          

CROSS-BORDER INSOLVENCY – EUROPEAN UNION

September 2008

INTRODUCTION

41.1 Introduction

The approach to insolvency law differs widely between nations, both in terms of the practical approaches to dealing with insolvency and in respect of matters of the principles of public policy.  This can lead to difficulties in dealing effectively with insolvencies that have a cross-border dimension.  Recent developments in international law have improved the position in respect of the recognition of foreign insolvency proceedings and, within the EU, clarification of the law to be applied in particular circumstances.

Along with Chapter 42, this chapter gives advice and information relating to the legislation concerning insolvencies of entities and individuals whose interests straddle international borders.  The information and advice given in this chapter covers the EC Regulation on Insolvency Proceedings, whilst Chapter 42 covers the UNCITRAL Model Law on Cross-Border Insolvency and procedures under the Act for the co-operation of courts in relation to foreign proceedings. 

The chapter is divided into the following parts:

Part 1 – History and background of the EC Regulation on Insolvency Proceedings (paragraphs 41.2 to 41.7)

Part 2 – Overview of the EC Regulation on Insolvency Regulation (paragraphs 41.8 to 41.19)

Part 3 – Opening of proceedings and national laws applicable under the EC Regulation (paragraphs 41.20 to 41.47)

Part 4 – Recognition of insolvency proceedings throughout member states and the effects of such recognition (paragraph 41.48 to 41.59)

Part 5 – Centre of Main Interests and bankruptcy petitions presented by citizens of other European Union nations (paragraph 41.60 to 41.79)

Annex A – Letter (in German) making application for a copy of a residency certificate

Annex B – English translation of Annex A

Annex C – Letter (in German) to creditors requesting evidence that bankrupt has informed his/her creditors of his/her move to UK

Annex D – English translation of Annex C

The following abbreviations have been used in this chapter;

COMI – Centre of Main Interests

CVL – Company Voluntary Liquidation

EU – European Union

The Regulation - EC Regulation on Insolvency Proceedings

UNICITRAL – United Nations Commission on International Trade Law

[On to Part 1 – History and background of the EC Regulation on Insolvency Proceedings]