Radu Lotrean
President of
INSOL Europe

We are currently planning our Conference and Events schedule for 2018, which already features many events, including:

• 31 May-1 June: EECC Conference, Riga (Latvia) - Registration Now Open!
• 7 June: Joint R3 / INSOL Europe Conference, London (UK)
• 13 June: Joint INSOL International / INSOL Europe Conference, Helsinki (Finland)
• 28-29 June: Joint Deutscher Anwaltverein (German Bar Association) / INSOL Europe European Insolvency & Restructuring Congress, Brussels (Belgium)
• 3-4 October: Academic Forum Annual Conference, Athens (Greece) - See also the Call for Papers below
• 4-7 October: Annual Congress, Athens (Greece)

For details of all our future events visit our website for the latest updates.

UNCITRAL’s Working Group V continues its consideration of a proposed new model law on the recognition and enforcement of insolvency-related judgments and draft texts on facilitating the cross-border insolvency of multinational enterprise groups.

Once again, INSOL Europe was honoured to be invited to send a delegation to the Working Group meeting held at the end of last year in Vienna. 

One of our delegates, Florian Bruder of DLA Piper has provided an update on the work of the Working Group including a summary of some of the key points that have been agreed and those which remain subject to further consideration at future sessions. 

His summary heralds the fast-approaching conclusion of the important work in these areas. As such, it provides valuable background material for those not yet abreast of the draft texts, to become familiar with them and thus aware of the draft legislation which states will be invited to adopt. Read the full summary on our website here.

In a cross-border insolvency, there are likely to be international elements that present themselves during the course of local proceedings in circumstances where a foreign office-holder wishes to seek recognition and exercise their powers in another jurisdiction. There are several English common-law jurisdictions that are party to the Cross-Border Insolvency Regulations 2006 (UK SI 2006/1030). 

These regulations give effect to the UNCITRAL Model Law on Cross-Border Insolvency 1997 (“Model Law”) and prescribe how the powers of foreign office-holders are recognised. There is also the Recast European Insolvency Regulation (2015/848) that governs cross border insolvency. However, the Channel Islands, and Guernsey in particular, are not parties to either of these instruments. Alex Horsbrugh-Porter and Michael Rogers explain the relevant provisions in Guernsey law. Read the full Inside Story and other articles here.

If you would like the opportunity to have your Inside Story published in a future edition, please email Communicatons Manager, Paul Newson for details.

David Buchler, Chairman of restructuring and turnaround advisers Buchler Phillips, writes on the recent collapse of the UK construction giant.

When Tarmac's construction arm was spun out in 1999 and rebranded as Carillion, the new name was said to be a corruption of 'carillon', a peal of bells sounding a clear, new identity to the industry. By January this year, the peal had slowed to a death knell, as Britain's second largest contractor collapsed spectacularly and controversially.

As the recriminations continue, a light has been shone on the industry's precarious business model of gigantic projects yielding meagre profits. Carillion's debts and pension deficit were for a long time wholly inconsistent with this model. A 3% margin on sales of £4bn left little wriggle room - that's why former CEO Richard Howson's apparent strategy of chasing risky low-margin contracts, while keeping some subcontractors unpaid for 120 days, was unsustainable.

The whiff of desperation about cash management did not elude the hedge funds which made fortunes shorting Carillion shares as far back as 2013. The inexplicably low tenders for contracts, now obviously to keep cash circulating, seem to have prompted fewer questions.

The revenue profile is, ultimately, why the company has gone into liquidation, rather than administration. It is clear that there are no viable parts of the business to sell. The contracts are certainly not meaningful assets to borrow against.

What remains baffling for the corporate recovery community is why the seven months between Carillion's major profit warning in mid-2017 and its eventual collapse did not feature a significant day-to-day involvement of external turnaround specialists. It beggars belief that the full picture of woe was not known to the board some time before this. Instead, directors persisted with a dereliction of duty on a scale rarely seen in a major company. The egregious abandonment of decency in boardroom pay, given the circumstances, showed a lack of grip on reality. 

Over more than a decade, Carillion had been a consolidator. It acquired Alfred McAlpine, Mowlem and part of John Laing. In 2014 it failed to win Balfour Beatty for £2bn. Now Balfour faces estimated costs of £45m from its suitor's collapse. None of these deals insulated Carillion from the flawed workings of its sector. Greater diversity only made the enlarged group even harder to manage, while possibly encouraging an unrealistic view of the top line. None of it helped margins, cash flow or risk management. 
  
The hedge funds were right, four years earlier. Last year, Carillion shares were consistently among the most shorted. The bells had begun to toll.

The Academic Forum has just issued a Call for Papers for the Athens 2018 Conference taking place on Wednesday 3 October-Thursday 4 October 2018. The overall conference theme will be "Party Autonomy and Third-Party Protection in Insolvency Law".

Included within the theme will be issues in contract law, property law, company law and private international law with a strong connection to insolvency law.

Proposals for the delivery of papers are now invited that challenge existing approaches, stimulate debate and ask profound questions.

Younger Academics are, of course, also invited to submit papers and may also choose to present their research in the conference session dedicated to the Young Academics' Network in Insolvency Law (YANIL).

Expressions of interest in delivering papers within the conference theme should be communicated by 15 March 2018 to Anthon Verweij, IEAF Secretary, by email at: anthon.verweij@gmail.com. Further information on the conference themes and topics as well as on the travel grants available for early scholars, please click here.

The Academic Forum is pleased to announce the generous support of Edwin Coe LLP.

The Winter 2017/18 edition of Eurofenix has now been published and all members should have received their printed copy. 

Eurofenix is the official quarterly journal of INSOL Europe. It is essential reading for members, licensed insolvency practitioners and all professionals involved in business recovery throughout Europe.

This is the first edition with new Joint Chief Editors Catarina Serra and Frank Heemann at the helm and features conference reports and photos from the 36th Annual Congress and Academic Forum conference in Warsaw (Poland) as well as contributions from around Europe and further afield on diverse topics such as the Nordic forum shopping landscape and cross-border insolvency in China.

We welcome contributions from new authors at all times. If you would like to contribute to the Spring edition (published in April), please contact Paul Newson with a synopsis of the article you would like to submit. 

Previous editions and further information about Eurofenix can be found here.