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14 December 2012
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Schultze & Braun News

Recent publications

Dr Annerose Tashiro
From Bondholder to Equityholder : Still a Difficult Route in Germany?
ABI Journal, June 2012, 44-45, 84-85

Frank Tschentscher
Germany welcomes new Insolvency rules
The Lawyer, www.lawyer-monthly.com, April 2012, 1-2

Frank Tschentscher
Germany : Good Tidings
The European Lawyer 02 2012, 31-32

Frank Tschentscher
The Germans are not coming
Accountancy Age, 12.03.2012

Dr Annerose Tashiro / Patrick Ehret / Frank Tschentscher
Trust, Parallel Debt Mechanism under N.Y. Law Are Now Recognized in French Insolvency Law
ABI Journal February 2012, 30 et seq.
European legal news
The European-Commission adopted a proposal to update the EU regulation on insolvency proceedings in its meeting on 12st December 2012. Ten years after its entry into force, the regulation 1346/2000 had to undergo a revision by the European Commission.

Dr Christoph von Wilcken
Attorney at law in Germany
Dr Christoph von Wilcken
Accordingly, an external evaluation study was launched at the end of 2011. In addition impact assessment studies were launched and a public consultation on the future of European insolvency law was held in the course of 2012. Now finally, the Commission has released a so-called insolvency package after the proposals were adopted.

The insolvency package comprises a proposal over the amendment of council regulation N° 1346/2000. There are five main topics the proposal concentrates on. With respect to the intensive work by law makers of the Member States in introducing chapter 11 like proceedings to their different national laws in the wake of the financial crisis the proposal tries to broaden the scope of the Regulation covering also “rescue” proceedings. One of the main issues of the Regulation in case law as well as in the overall debate was the concept of “centre of main interests” (COMI). This concept which determents what jurisdiction is applied to the particular insolvency case will not be changed according to the proposal. However, creditors in Member States other than where the proceedings are actually opened should have the right to challenge the opening decision.

Considerable changes are proposed in respect to main and secondary proceedings. The administrator of the main proceedings is to be heard by the court which is requested to open a secondary proceeding. The court on request of the administrator of the main proceeding shall be able to postpone or even to refuse the opening of the secondary proceeding if such proceeding is not necessary for the protection of the interest of the local creditors. A very similar approach, the proposal takes in respect to insolvencies of groups of companies. Also here the proposal tries to facilitate cooperation between administrator and court like in main and secondary proceeding.

However, there is no administrator who will be in the leads by operation of law. Nevertheless, administrators from one proceeding have a right to ask for a stay in respect to other proceedings and to introduce a rescue plan within the different insolvency proceedings of the group. The proposal in addition requires Member States to publish the relevant court decisions in cross boarding insolvency cases in a publicly accessible register and provides for the interconnection of national insolvency registers. It also introduces standard forms for the lodging of the claims.

It seems quite clear, that on its way through the EU Parliament and the Council of the EU the proposal will see some quite lively discussion. The changes proposed by the Commission are more extensive than one would have expected. Particularly, in respect to the provisions for group insolvencies some further amendments seem to be necessary. The introduction of the rights to challenge court decisions should be treated carefully since at least in business recoveries or restructuring cases time is of the essence and dissenting parties should not get the change to bring the process to a standstill.

Dr Christoph von Wilcken, Attorney at law in Germany

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