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INSOL Europe news and offers
Summer 2022


Dear Members

Welcome to the August edition of the INSOL Electronic Newsletter, yet another very good read, providing you with highly relevant updates on restructuring and insolvency matters across the globe.

Before getting into a quick summary of what you will find in this month's Newsletter, I wanted to share a few brief updates with you. I have been spending a considerable amount of time over the past couple of months with individual members, listening to thoughts and perspectives about our organisation. It has been truly energising for me to witness almost universal enthusiasm and passion for our network and what we do. Equally, it has been tremendous (and sometimes a little sobering!) to capture the many suggestions of where we can do better and areas where complex challenges present themselves. During the remaining months of my presidency, I will endeavour to put into actions some of the suggestions and intensify the focus on providing you with the best offering possible. However, while committed to leading the way, this is something that cannot be done without you.

I have previously referred to the phenomenon described in Jim Collins’ book “Good to Great” called the “Flywheel Effect”. It speaks to the idea that there is no one thing responsible for building an organisation that is an industry leader. No silver bullet or epiphany, no grand program or a single stroke of luck. Not even one dynamic leader(!). Instead, it is all the things we do together. Like relentlessly pushing a big, heavy flywheel, it is about the momentum that builds from one turn to the next until the breakthroughs begin and achievements compound. So, if you wish to help turning the wheel and contribute, step forward and share your ideas – it is appreciated!

Turning then to this month's edition, we have a great collection of highly topical articles and case notes from jurisdictions such as Portugal, the UK and US. Our Judicial Wing is announcing an exciting new project in which the operation of the Model Law will be examined and contrasted with the experience in a number of states where the Law has not been adopted. This month’s newsletter also includes an important update on the UK Law Commission’s consultation paper and its proposals to ensure that the law recognises and protects digital assets. 

Before I close, it would be very remiss of me if I did not remind you of the Council elections (please vote!) and, equally important, our upcoming Annual Congress to be held from 6 – 9 October 2022 in in Dubrovnik, Croatia. Our Technical Committee has worked tirelessly and come up with an exciting programme lined up with an impressive roster of expert speakers and panels on various cross-border insolvency and restructuring topics. Do not forget to register – if you miss it, you will regret it!

And as always, I hope wherever you are reading this, you are staying safe and well. 

Frank Tschentscher
President INSOL Europe




President of
INSOL Europe


This issue is kindly
sponsored by:



DLA Piper is a global law
firm with lawyers located
in more than 40 countries
throughout the world.

Annual Congress 2022 - Dubrovnik - Technical Update


Our Annual Congress in Dubrovnik, Croatia
is now only 6 weeks away!

Download the Congress brochure here

Registrations for our second Congress of the year are going well, with over 300 delegates already having booked their place. If you haven't already made plans to join us, download our Congress brochure or visit our website for the latest technical programme. 

The technical co-directors, Frances Coulson (Wedlake Bell, UK) and Jelenko Lehki (Lehki Law Office, Croatia) along with our expert technical committee have worked hard to pull together an excellent list of speakers and panels.

We are particularly pleased to welcome Lord Justice Snowden from the UK, whose restructuring cases, before his elevation to the Court of Appeal, included Virgin Air, Virgin Active, and Smile Telecom, amongst many, and who will give his thoughts on restructuring in the UK, as well as joining a panel with sister Judges from Croatia and Romania.

There are diverse technical panels covering energy and healthcare sectors, as well as the risks from cyberattacks covered by the Anti-Fraud Group, and inter-generational challenges of the future of work from the Young Members' Group. Not unnaturally, there will be focus on the shifting sands of recognition, as well as a session on designing the new European Restructuring Plans and a great deal more.

We have secured significant speakers from the IMF and Croatian National Bank as well as academics and a broad range of panellists from our membership and we hope that many of you will join us for what promises to be a fantastic conference, let alone that it is in a magnificent venue in beautiful Dubrovnik.

Our Academic Forum Annual Conference will take place from 5-6 October 2022 at the same venue. Registration for that event is now also open.



With thanks to our Congress Main Sponsor:

Council Elections 2022: Time to cast your vote!

The polls are now open in our annual Council elections, which take place every year as the current Council members approach the end of their appointment.

This year, there are two General seats (non-reserved) available as well as a new seat on Council for Poland, which now has more than 30 members so is eligible for a Reserved seat.

Full details can be found on our websiteDetails about the role of Council Members can be found here.

If you have not yet received email notification of the election process, please contact Paul Newson.

Restructuring and Insolvency Statistics in Europe: Return to Reality?

The latest national company insolvency statistics confirm the trends that the restructuring and insolvency experts anticipated so far last year.

The increase in the number of insolvency proceedings is expecting to continue in the following months (and probably the coming year) to reflect the consequences of the withdrawal of most measures taken by European public authorities to support their own businesses in the Covid-crisis.

Failing to meet the test of viability (requirement test as provided for by the Directive on Restructuring and Insolvency), the companies are (or will be) simply excluded from the varying restructuring tools put in place by the European Member States. 

Source: Eurostat

Consequently, it would lead these companies with no long-term viability to see their restructuring proceedings converted into liquidations or to apply for compulsory proceedings leading in most cases, if not all, to liquidations.

If we have a look to national insolvency statistics country per country, or those published by Eurostat (lastly on 17 August 2022), one can see that the latest available figures for the beginning of the year show a return to reality on the insolvency scene. Since the beginning of the year, the upward trend has clearly accelerated and now approaching the levels seen in the pre-covid crisis period (2019).

No doubt that after the Covid crisis, the geopolitical and economic situation with the expected energy crisis will now put new pressures on businesses, and particularly on micro and small enterprises, and will not lead to any improvement to these numbers…

Find the latest National and European Insolvency Statistics published on our website.


Progress report on the implementation of the EU Directive on Restructuring and Insolvency

By mid-August 2022, 17 EU Member States have notified the European Commission of their compliance with the Directive on Restructuring and Insolvency, namely Greece, Austria, France, Germany, Portugal, Croatia, Lithuania, Slovakia, Estonia, Romania, Denmark, Italy, Slovenia, Finland, Sweden, Hungary and lastly, Ireland.

A few numbers of EU Member States will implement the EU Directive in their national laws only after the Summer break including Poland, Latvia, Malta, Luxembourg, Bulgaria, Belgium, Czech Republic, Cyprus, Spain and the Netherlands, mainly due to the delay of the national legislative processes.

The final implementation of the EU Directive by all EU Member States is expected for early 2023. The progress of the implementation is available on the INSOL Europe website.

As Member States have to transpose EU Directives in a complete way, every obligation of the directive to be transposed will be covered by two distinct checks: the transposition and conformity checks. Hence, the transposition check conducted by the European Commission should ensure within a six-month period starting when the national transposition measures are notified by the Member State that they cover each obligation contained in each article and sub-article/paragraph of the Directive, as well as annexes where relevant.

The conformity check which should be completed within 16 to 24 months from the date of the communication of the national transposition measures will assess the compatibility of the national implementing measures with the Directive’s provisions/obligations, including definitions. No doubt that the compliance test of national measures to the EU Directive will take some time...

Gas: Guess what?

These days, with the war imposed on Ukraine on 24 February 2022 continuing with no end in sight, the German Ministry for Economic Affairs and Climate Action is focusing on action! 

Natural gas, once a resource abundantly available and cheap, has become a torture tool of choice of a bully sovereign in his attempt to counter well deserved sanctions. Consumers and industry, left with no option to instantly replace natural gas, are getting shivers when thinking of the next utility bill, foreseeing more digits than ever on the bottom line. Utilities are facing bankruptcy, left with long-term fixed price supply commitments as their own long-term supply agreement is turning out to be a useless piece of paper.

Against this background the ministry’s actions seem to be determined to – with the famous words of Mario Draghi – do “whatever it takes”, to assure appropriate and continuous supply and at the same time fairly share the burden among natural gas consumers and the state.

Curious? Details on the subject are to be published in the Autumn edition of Eurofenix.

Inside Story: Harmonisation in the EU - the Portuguese Perspective

‚ÄčThe transposition of the Directive on Restructuring and Insolvency (the “Directive”) in Portugal was carried out by Law No 9/2022, of 9 January, in force since 9 April.

It is no secret that the transposition was made with little time, hence without much reflection. The COVID-19 reason may be invoked, but the fact remains that the main lines of the Directive have been known since the Commission Recommendation of 12 March 2014.

Some of the measures in the Directive present a considerable degree of novelty and of complexity and even some syncretism (aggravated, the latter, by a poor translation of the Portuguese version). Inevitably, there are discrepancies or non-conformities with regard to what the Directive required. A general consequence may be drawn just from the Portuguese example: it is doubtful that the Directive will achieve the much-coveted harmonisation of insolvency law.

The scope of Law No. 9/2022 roughly corresponds to the scope of the Directive on restructuring and insolvency and reflected in its title – “preventive restructuring frameworks” and “discharge of debt and disqualifications”. The amendments with the greatest impact are regarding, therefore, the Special Revitalisation Proceedings (“PER”) and the discharge.

As mentioned, at several points, the regime presents discrepancies, non-conformities or deviations from the provisions of the Directive. In this month's INSIDE Story, Judge Catarina Serra, Justice of the Supreme Court, Portugal, illustrates this assertion with two (emblematic) examples: the rule on the formation of separate classes and the rule on ipso facto clauses.

Read the full article and previous INSIDE Stories on our website here.

Live and Let Fly: Turbulence Lands SAS in Chapter 11

On 5 July 2022, Scandinavian airline SAS AB and 13 affiliates filed for Chapter 11 protection in the Southern District of New York.

44% owned by the Kingdoms of Denmark and Sweden, SAS has encountered financial turbulence resulting from increased debt, reduced revenues, and labor shortages, common in an aviation industry that was heavily impacted by the pandemic and struggles to scale back up in the summer of 2022. David Conaway will be reporting on the case in the upcoming Eurofenix Autumn issue. 

Meanwhile, on 18 July 2022, Shumaker, Loop & Kendrick, LLP won an appeal at the United States 11th Circuit Court of Appeals. In the Chapter 11 case of Beaulieu Group, LLC, they defended Auriga Polymers Inc. (subsidiary of Indorama Ventures) in a preference claim filed by the Beaulieu Liquidating Trustee under Section 547 of the Bankruptcy Code. 

David Conaway, Attorney at Law for Shumaker, writes: “We successfully asserted Auriga’s “subsequent new value” defense, that after preference payments were received, Auriga shipped more goods. A substantial portion of the goods were shipped within 20 days prior to the Chapter 11 filing, which provided Auriga a Bankruptcy Code Section 503(b)(9) administrative priority claim for the value of the goods shipped. The pivotal issue in this case, as in virtually every preference case, was whether Auriga could both be paid on its Section 503(b)(9) administrative expense priority claim (for goods shipped within 20 days prior to the Chapter 11 filing) and also reduce its preference liability based on the value of shipments that comprised such claim.

In the vast majority of Chapter 11 cases, after a Section 363 sale of all assets, the “residual” assets are transferred to a “creditor” trust to realize upon such assets.  Ironically, the “residual” assets are mostly preference and other avoidance claims against creditors.  The liquidating trustees have consistently asserted that a creditor may not both receive payment on its Section 503(b)(9) claim, and also reduce its preference liability for 20 day shipments, as impermissible “double dipping”.  However, the United States 11th Circuit Court of Appeals in a well-reasoned opinion ruled that a creditor/preference defendant is entitled to both payment on its Section 503(b)(9) claim, and a reduction of its preference liability by the value of such claim.”

Judicial Wing Project on UNCITRAL Model Law on Cross Border Insolvency

For many years much of the focus in the Eurozone has been on the operation and revisions to the European Insolvency Regulation and the Recast of 2015. This has been understandable, having regard to its far reaching effects and the extensive caselaw and commentary on that Regulation. 

However, it is increasingly important that sight not be lost of the importance of the UNCITRAL Model Law on Cross Border Insolvency, first enacted in 1997, and the UNCITRAL Model Law on Enterprise Group Insolvency (designed to equip States with modern legislation addressing the domestic and cross-border insolvency of enterprise groups, complementing the UNCITRAL Model Law on Cross-Border Insolvency), adopted in 2019.

Not only has its relevance continued worldwide, but after BREXIT there is a need to examine its increasing relevance for cases with a UK dimension. 

The Judicial Wing is planning to launch a project in which the operation of the Model Law will be examined, and contrasted with the experience in a number of states where the Law has not been adopted. This will include a survey of judges and a report which will be published next year by the Judicial Wing. The project will be led by Nicoleta Mirela Nastasie and Eberhard Nietzer. More details will be published on our website as the project develops.

Defining and Protecting Digital Assets in a Digitised World

The UK Law Commission has recently published a consultation paper which contains provisional law reform proposals to ensure that the law recognises and protects digital assets (including crypto-tokens and cryptoassets) in a digitised world.

Courts have already ruled in England and Wales (AA v Persons Unknown) that crypto-tokens can be considered as property despite not falling under any of the two existing categories of property: “things in possession” (tangible, moveable and visible things) and “things in action” (personal property capable of being enforced by action).

In this regard, the consultation paper's key recommendation is the explicit recognition of a new, third category of personal property (“data objects”) that are distinct from those already existing categories. This would ensure that the nuanced features of digital assets are properly addressed.
The proposed definition of this third category of “data objects” under the paper follows three cumulative criteria: (1) being composed of data represented in an electronic medium; (2) existing independently of persons and of the legal system; and (3) being rivalrous. Although a fourth criteria (divestibility) is also considered, it is not proposed as a standalone criterion to allow for further flexibility.

Having considered stakeholder feedback that possession and possessory concepts are inappropriate for digital assets, the Law Commission provisionally suggests developing the concept of control through the common law instead. A person in “control” of a data object can exclude others from it, use it, transfer it and identify themselves as the person able to do these things. 

The paper goes on to discuss various issues around cryptoassets, including their transfer, the defence of good faith for a purchaser for value without notice, custody arrangements and trusts, and their treatment as security and collateral. It also considers how existing legal frameworks for things such as breach of contract, vitiating factors, following and tracing, equitable wrongs, proprietary restitutionary claims, and unjust enrichment can be applied to them.

You can download the consultation paper from the Law Commission website.

We welcome feedback, news and story ideas for future newsletters. 

Please send your suggestions to Paul Newson, CEO & Communications Manager,

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Disclaimer: This newsletter is sent to members of INSOL Europe. No responsibility legal or otherwise is accepted by INSOL Europe for any errors, omissions or otherwise. The opinions expressed in the articles that appear are not necessarily shared by any representative of INSOL Europe.