Vol 17 (2020) - Issue 1

Article preview

Bringing Non-EU Insolvencies to Germany: Really so Different from the UNCITRAL Model Law on Cross-Border Insolvency?

Synopsis

After almost any type of Brexit, English restructuring and insolvency proceedings are likely to fall outside the scope of the European Insolvency Regulation (EIR). In addition, non-EU restructuring hubs like Singapore market their jurisdictions prominently in the EU market while even the US legislator is considering the addition of a scheme-like process to the US Bankruptcy Code. The recognition of such third country proceedings within the EU and in particular in Germany will not follow the mechanisms of the EIR but fall within the scope of the respective national framework of international insolvency law. While a handful of EU member states have oriented their legislation to the consistent requirements of the UNCITRAL Model Law on CrossBorder Insolvency, Germany did not follow this path and instead created autonomous rules for recognition and cooperation. The following article will compare the respective recognition requirements and mechanisms and ultimately show that the German rules are clearly more recognition-friendly and overall do not fall short of the standard set by the Model Law. Non-EU main restructuring and insolvency proceedings including their plans – in particular US Chapter 11 plans – are routinely recognised in Germany without any need for court involvement. The recognition of schemes would depend on the way the rules governing them are structured.