Based on a referral by the German Federal Court of Justice (BGH) the ECJ held that provisions such as § 64 of the German Limited Liability Companies Act (GmbHG) which regulates the personal liability of German GmbH directors in cases of insolvency, can be regarded as an insolvency law rule by virtue of Art. 4 para. 1 European Insolvency Regulation. The provision can therefore be applicable to a UK limited company (having its centre of main interest in Germany) and its director respectively, in accordance with European law: according to Art. 4 para.

Daycare company Estro was declared bankrupt in July 2014, but the undertaking was relaunched immediately, as the relaunch was prepared in a ‘pre-pack’ insolvency. All 3600 employees of the bankrupt company were dismissed by the administrator. About 2600 employees were immediately employed again by the relaunched company, which company was a so called ‘connected party’ as the shareholder also held a substantial part of the shares of Estro.

Introduction

A referendum on whether the UK should leave or remain within the EU will take place on 23 June 2016. This briefing considers what the legal consequences of a vote to leave the EU (Brexit) might be for the UK restructuring and insolvency market. Its purpose is not to influence readers towards either the “Leave” or “Remain” camp; rather, it is intended to illustrate the legal changes that Brexit would cause and to consider how the UK might respond to those changes.

Including an unsecured creditor  in an agreed payments waterfall does not by itself confer on that unsecured creditor  the benefit of a mortgagee’s usual duties on enforcement of security, or a direct claim against the sale proceeds.

1. Employment in a Member State of workers resident therein by companies declared insolvent that, notwithstanding formal registration in a third country, have their real seat in said Member State

In case of arrangement with creditors under Article 160 of the Bankruptcy Law, Article 182-ter, introduced by Article 146 of D.Lgs. n. 5/2006, expressly states that taxpayers can propose a partial payment of income taxes, but not of VAT and withholding taxes, for which the payment can be only deferred.

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.