Vol 15 (2018) - Issue 2

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Is the Recognition of Insolvency Proceedings under the Recast EIR Like Buying a Pig in a Poke?

Introduction

Just as the EIR of 2000, the EIR of 2015 continues to follow the principle of universality according to which all of the obligor’s assets are taken into account in the main insolvency proceeding, in whatever state they are located. Whether this principle of universality is enforceable in all states worldwide may differ from state to state. Initially, insolvency proceedings are national proceedings which must be recognised by the other states affected (Article 19 EIR). They must tolerate a foreign sovereign act in their own territory. As a result of its legislative competence and judicial cooperation in civil matters (Article 81 TFEU, recital number 3 EIR), specifically Article 19 EIR, the European Union has succeeded in enforcing the principle of universality within its Member States. It enables cross border restructuring and is an integral part of a modern European restructuring culture.