Introduction:

The Court of Justice of the European Union has ruled that a provision of German law falls within the scope of Article 4 of the EC Regulation on Insolvency Proceedings, thereby paving the way for a German court to require a director of an English incorporated company to make payments under German law where the company has been placed into insolvency proceedings in Germany. 

Legal background

Council Regulation (EC) No 1346/2000 concerns insolvency proceedings with debtors which operate cross-border in the EU.

Broadly, the law applicable to insolvency proceedings is the law of the member state in which the insolvency proceedings are opened. This includes rules relating to the voidness, voidability or unenforceability of legal acts which are detrimental to all creditors; article 4.

The Irish High Court recently, for the first time, recognised and gave effect to a Swiss law insolvency and restructuring process that had been commenced in Switzerland in respect of a Swiss company.

On 7 September 2015 an act amending the Civil Procedure Code was published. The amendments include changes to proceedings on the enforcement of liabilities. The changes aim to speed up proceedings by computerisation, and at the same time clarify various issues that have arisen in the application of existing regulations.

The European Court of Justice (the "ECJ") has ruled that, in certain circumstances, when a subsidiary company is wound up, its employees will transfer automatically to its holding company.

What happened?

Air Atlantic SA ("AIA") was a Portuguese company operating in the aviation sector. It had been providing charter (or non-schedule) flight services since 1985.

On 19 February 1993, AIA was wound up. During the winding-up, several of AIA's employees were dismissed as part of a collective redundancy.

The ECJ has issued a preliminary ruling on the use of Article 13 of Council Regulation (EC) No 1346/2000 on insolvency proceedings ("the Regulations") as a defence to clawback claims by an insolvency office holder.

In this case Sportland, a Finnish company, sold goods supplied by Nike European Operations Netherlands BV ("Nike"), a Dutch company, under a franchise contract governed by Dutch law. Sportland owed Nike approximately €200,000 and repaid their debts in ten instalments very shortly before insolvency proceedings were opened in Finland.

Introduction

Welcome  to  the  September  2015  Newsletters:    Highlights  this month include:

1.  Art. 1(1)(c) of the Regulation. Appraisal

1. El artículo 1.1C del reglamento. Valoración

In Ferreira da Silva e Brito and others v Estado portuges (C-160/14) the European Court of Justice (the ECJ) considered the meaning of a "transfer of a business" under the Acquired Rights Directive (the Directive) in relation to a situation whereby a majority shareholder assumed significant functions of a former subsidiary, which had been wound up.

Background