On November 1 2007 the State Commission for Insolvency presented the Preliminary Bill for an Insolvency Act to the minister of justice. The bill contains rules for the recognition of insolvency proceedings in non-EU countries and the law applicable to foreign proceedings. This update examines those rules and their relationship to the EU Insolvency Regulation and the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency.
Case Law
Background
What and where is a company's ‘centre of main interest’ – its COMI – and why should you care? This is not an esoteric question but a live issue in determining which nation's courts and laws deal with international insolvency issues including administration and liquidation.
Retention of title clauses are clauses by which the title to property to be sold is retained by the seller until the purchase price has been paid in full. This is an exception to the general rule provided in the Finnish Sale of Goods Act, according to which the title to property is transferred to the buyer at the same time as possession.
1. Background
The sauvegarde filing by Camaïeu’s holding company Modacin France SAS (Holdco) has been reported in the French press as one of the first cases where a safeguard proceeding has been opened by a company’s management in order to prevent its creditors from enforcing the fiducie previously granted to them over the shares of Holdco’s subsidiary as part of a court-approved restructuring proceeding (conciliation) of the group back in 2016.
Presented as a major measure of the five-year French presidential term, the law “on growth and business transformation”, also known as the PACTE Act, came into force on May 24th, 2019. Amongst the changes that were brought, some of them deserve a particular focus.
Two phases of the reform. The PACTE Act revises the insolvency legal framework and mainly empowers the executive to directly implement the EU insolvency directive and to reform the law on security interests within a period of two years.
The first phase of the reform
Introduction
The Sapin II Act of November 8 2016 amended the regime governing directors' liability in an insolvency scenario in order to encourage the recovery of honest directors of failed businesses.
In light of the UK’s cram down and director-friendly processes, in particular its scheme of arrangement model, major European economies such as France, Germany and Italy have worked hard to develop regimes that give greater emphasis to pre-insolvency alternatives. These new regimes create cram down mechanisms and encourage debtor-in-possession (DIP) financings, ultimately aiming to make restructuring plans more accessible, more efficient, and crucially more reliable; essentially more in tune with the Anglo-American approach to insolvency and restructuring.