Authors: Prof. Burkhard Hess (Luxembourg/Heidelberg), Univ.-Prof. Paul Oberhammer (Vienna/London/St. Gallen) and Prof. Thomas Pfeiffer (Heidelberg), summarized by team member Robert Arts
The first step towards the upcoming amendment of the European Insolvency Regulation was an evaluation of its application since its adoption in 2002. The Regulation itself required the evaluation to make sure that European Insolvency Law keeps up with the constant changes to the multitude of national insolvency regimes. A team from the Max Planck Institute Luxembourg (Hess), Heidelberg University (Pfeiffer), and the University of Vienna (Oberhammer) conducted the research and collected empirical data in all 26 concerned Member States.
The evaluation shows that the defining principle of the Regulation, that of universality (single proceeding and single insolvency statute with universal effect and recognition) has proven to be a great boon for the procedural handling of cross-border insolvencies in Europe. The report consequently proposes to further strengthen universality by reducing the possibility of separate, territorial proceedings.
Moreover, the report finds that widening the scope of application (by inclusion of pre-, hybrid and annex proceedings and by providing – for the first time ever – a framework for collaboration within group of company insolvencies), is necessary to keep the Regulation in line with the ongoing shift from liquidation towards the reorganization of companies.
The report also addresses technical difficulties arising from cross border insolvencies – e.g., the lodging of claims, the need for communication amongst judges and administrators and the information deficit of foreign creditors.