As Europe is facing a severe economic and social crisis, the European Union is taking action to promote economic recovery, boost investment and safeguard employment. The economic crisis has a direct effect on people, jobs and businesses. It has led to an increase in the number of failing businesses. In the period between 2009 and 2011, an average of 200,000 firms went bankrupt per year in the European Union. About 25% of these bankruptcies have a cross-border element. About 50 % of all new businesses do not survive the first five years of their life.
Hybrid US/European restructurings can lead to unexpected commercial outcomes because of different practices in intercreditor agreements.
On 20 May 2015 the European Parliament adopted a recast of the European Insolvency Regulation. The Recast Regulation is in line with the EU’s current political priorities of promoting economic recovery and boosting growth and employment. The key objectives of the Recast Regulation are to move away from the traditional liquidation approach towards more of a “second chance approach” for businesses and entrepreneurs in financial difficulties, and to enhance cooperation and coordination in cross-border insolvency proceedings.
Scope
The legislative process regarding the proposal of the Parliament and of the Council to amend the Regulation (whichwould introduce various changes as proposed by the Commission in order to address issues arisen in the enforcementof the Regulation) is approaching its conclusion
Introduction
Recent uncertainty in the European financial markets has led many European borrowers to look to the U.S. debt markets for liquidity. However, U.S.
Recent Developments
The tenth anniversary of the EU Council Regulation on insolvency proceedings (EC No 1346/2000) has arrived amidst wide debate surrounding whether the regulation remains valid and current in its existing form. The European Commission recently launched a consultation examining the current insolvency regime in Europe.
Poland – protective and secondary insolvency proceedings can run in parallel in different Member States
Secondary insolvency proceedings may be begun in the member state where the debtor has an establishment, when main proceedings with a protective purpose are already pending in another member state, according to the ECJ.
Protective proceedings (known as ‘sauvegarde’ proceedings) are those where the debtor proves that he is not insolvent but is faced with difficulties, financial and otherwise, that he cannot overcome.
The EU insolvency law has resulted in insolvent debtors shopping for a better jurisdiction in which to become bankrupt. This article examines why and how.
Why?
The EC Regulation on Insolvency Proceedings 2000 (the ECIR), came into effect in May 2002, providing a framework for the national jurisdictions to work together by recognition of each states insolvency mechanisms. However the EC Regulation does not harmonise substantive differences in insolvency law between the subscribing nations.
On 30 March 2012, the European Commission published a consultation on the future of European insolvency law.
The cornerstone of European insolvency law is Regulation (EC) No 1346/2000, known as the Insolvency Regulation. The Insolvency Regulation has been in force since 31 May 2002 and applies whenever a debtor has assets or creditors in more than one member state. It sets out provisions in relation to jurisdiction, recognition, applicable law and the coordination of insolvency proceedings opened in several member states.