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News from INSOL Europe
11 March 2024
The fourth annual Fraud Conference took place on 29 February, welcoming 160 delegates to the Royal College of Physicians in London. A collaboration between INSOL Europe’s Anti-Fraud Forum, the Fraud Advisory Panel and R3, this year’s theme was “The Future of Fraud: Is Seeing Believing?” with the event bringing together a range of counter-fraud specialists from policy makers to insolvency and asset recovery experts to academics.
The opening keynote by Professor Oli Buckley (UEA) on AI and Deepfakes provided much food for thought, being something of a beginner’s guide to creating voice clones. Arun Chauhan (Conference Chair) and Frances Coulson (INSOL Europe Vice President) were most surprised to find their voices cloned from brief, publicly available samples. The use of AI by both bad actors and as a tool to combat fraud was explored over the course of the day, with a subsequent session exploring the latter.
A breakout panel facilitated by Bart Heynickx (INSOL Europe Anti-Fraud Forum Co-Chair) considered international collaboration across a range of jurisdictions including the UK, Belgium, Netherlands and UAE. Participants included INSOL Europe members Luke Harrison and Ferry Ortiz Aldana. Other panels throughout the morning included a consideration of large collapses, such as FTX and Wirecard; a discussion about luxury goods, counterfeiting and provenance, and the disruption of rogue companies and directors.
During the course of the afternoon, Frances Coulson facilitated an in-depth exploration of the failure of public bodies to behave in a fiscally responsible manner, focussing on the Thurrock Council controversy and its consequences. Penny Dunbabin (Home Office) provided a brief run-through of the new “failure to prevent” guidance, which provided a jumping-off point for a debate chaired by Carmel King (INSOL Europe Anti-Fraud Forum Co-Chair) on whether the Economic Crime and Corporate Transparency Act and similar legislation are likely to prove effective.
The final session of the day was a much-anticipated update on the Post Office scandal. Kay Linnell, who had spoken on this topic alongside colleagues at the Fraud Conference 2022, received rousing applause for a compelling account of this ongoing pursuit of justice and restitution.
As ever, the networking lunch and closing reception offered delegates the opportunity to catch up with old friends and to meet some new contacts. A forward-facing conference considering many of the topics most important to the future of our profession left delegates plenty to talk about!
Report by Carmel King & Bart Heynickx, Co-Chairs of the INSOL Europe Anti-Fraud Forum
22 February 2024
The 63rd session of the Working Group was held from 11–15 December 2023 in Vienna. INSOL Europe was represented by Past President Frank Tschentscher and Florian Bruder (Council Member, Germany).

Members of the Working Group and observers to the session continued their deliberations on two current projects, namely asset tracing and recovery in insolvency proceedings and, further, the law applicable in (cross-border) insolvency proceedings. INSOL Europe’s representatives engaged actively with both, delegates and observers and shared practical experience and lessons learned from cross-border cases.
Asset tracing and recovery (ATR) in insolvency proceedings
The 63rd session picked up from the previous session and commenced with a review of an updated draft of the descriptive, informational and educational draft text on asset tracing and recovery in insolvency proceedings (ATR). The objective of the Working group is to raise the level of awareness of ATR tools that are available in cross-border cases. The current draft, which now reflects the latest submissions by, inter alia, the EU, Grip 21 and UNIDROIT and other observers as well as delegate input, provides an extensive overview of ATR tools found in the insolvency regimes of certain jurisdictions and in UNCITRAL insolvency texts to achieve said objective. Indeed, policy makers, legislators and judges but also practitioners and researchers will no doubt will find the (further updated) text very helpful when assessing the availability, accessibility, effectiveness and efficiency of their domestic (and cross-border) ATR frameworks.

The Working group acknowledged that increasing ATR tools’ effectiveness on a global level is essential in a digital age, given namely the ease of movement of (digital) assets cross-border and the instant conclusion of multiple transactions whose parties may not be (immediately) identifiable. That said, it is also acknowledged that technological advancement may allow for more flexible, creative and innovative ways to keep up with (traditional) ATR challenges. The toolkit intends to assist with those endeavours and, at the same time, connects the reader to the work of other organisations that are active in this area of policy making (for instance UNIDROIT).

The Working Group – principally – supported both the text of the current draft and the associated appendix. The toolbox approach for ATR in insolvency proceedings as described in appendix I was widely welcomed, although more debate is required. For anyone interested in the topic of ATR, the draft text can already provide an insightful read.

Applicable law in insolvency proceedings
The second part of the session was devoted to the very difficult matter of the law applicable in insolvency proceedings. The project on applicable law in insolvency proceedings has already reached the stage of draft legislative provisions with accompanying commentary. 

A lively session highlighted the complexities of cross-border insolvency and workout-situations both for practitioners and law-makers. The Working Group deliberated the scope and content of the issues covered by the lex fori concursus but the most difficult discussions evolved around the carve-out provisions in the legislative text and namely the law applicable to avoidance claims, the treatment of secured creditors enjoying rights in rem security, the potential impact on payment and settlement systems in the financial sector and the potential impact on pending litigation or arbitration proceedings. Most prominently, the ability of the lex fori concursus of a (main) insolvency process to stay or amend the security interest in collateral situated/located abroad was a topic of intense debate. While some delegations strongly supported the application of the lex fori concursus, others disagreed fundamentally.

On all subjects, the Working Group made significant progress but also requested that the Secretariat performed additional research on options that were discussed. For the European lawyer it will be interested to hear that the EU delegation appears to have abandoned a position that firmly demanded the adoption of Art 8 EIR, which would prohibit any impairment of security rights in assets located/situated in another Member State. Instead, the EU introduced a compromise text that included the ability to impair such security rights under the insolvency law of the country where the assets are located/situated. It stands to reason that such a compromise would also be the approach for a tentative reform of Art 8 EIR in the near future.

Frank Tschentscher, Deloitte Legal
Florian Bruder DLA Piper
08 December 2022
On 7 December 2022, the European Commission proposed new measures to further develop the EU’s Capital Markets Union (CMU), including a proposal for a Directive harmonising certain aspects of Insolvency Law.

The proposal for a Directive targets the three key dimensions of insolvency law: (i) the recovery of assets from the liquidated insolvency estate; (ii) the efficiency of proceedings; and (iii) the predictable and fair distribution of recovered value among creditors. 

The proposed Directive is divided into nine titles: general provisions (Title I), avoidance actions (Title II), pre-pack proceedings (Title III), duties of directors (Title V), simplified winding-up proceedings for microenterprises (Title VI), creditors’ committee (Title VII) sets out provisions on the creditors’ committee, measures strengthening transparency of national laws on insolvency proceedings (Title VIII) and final provisions (Title IX).

For example, the Proposal includes rules on actions to preserve the insolvency estate (i.e. avoiding actions by debtors that would reduce the value that creditors can get), on creditors’ committees to ensure a fair distribution of the recovered value among creditors; on so-called “pre-pack” proceedings (i.e. where the sale of the business is agreed before the insolvency starts) and on the duty on directors to timely file for insolvency to avoid that the value of the company deteriorates. It also introduces a simplified regime for microenterprises to lower the costs of winding them down and to enable the companies' owners to be discharged from debt, granting them a fresh start as entrepreneurs.

For more information, please see the Proposal available here.
Source: European Commission

Have your say!

The Proposal for a Directive harmonising certain aspects of insolvency law (COM(2022) 702 final) is open for feedback for a minimum period of 8 weeks (08 December 2022 - 03 February 2023  (midnight Brussels time)). Please note however that the eight-week feedback period is being extended every day until the adopted proposal is available in all EU languages.

INSOL Europe members contributions are very important as all feedback received will be summarised by the European Commission and presented to the European Parliament and Council with the aim of feeding into the legislative debate. 

You can write in any official language of the EU (including English) by a free text (4000 characters maximum) or by adding an attachment (files must be less than 5MB). Please be aware that feedback received will also be published on the site of the European Commission.

To have your say, you will need to adhere to the feedback rules and to register or login using your account here.
21 October 2022
INSOL Europe's second 'Annual Congress' of the year took place in its usual Autumn slot at the Rixos Hotel in Dubrovnik from 6-9 October with over 360 delegates in attendance, report Myriam Mailly and Paul Omar.

With opening remarks welcoming delegates to Dubrovnik on Friday 6 October 2022, two keynotes in quick succession were delivered by Bojan Fras (Vice-Governor, HR National Bank) on the NPL situation in HR and possible connection between NPL ratios and insolvency in HR. Continuing the theme of precarity, José Garrido (Legal Dept, IMF) spoke on the role of the IMF in maintaining international financial stability and insolvency law as a critical element of robust financial frameworks. Delegates were then taken through four plenary sessions, the first on “Designing the New European Restructuring Plans”, with panellists dissecting issues around a group case study across their jurisdictions, particularly dealing with recognition and enforcement frameworks.

For the breakouts immediately following, the Norwegian Air case, managing risky businesses from the frontline, asset-tracking and recovery in the EECC as well as healthcare industry cases all featured to challenge and inform delegates. The second plenary session on “Recognition of Insolvency(-related) Decisions” picked up the recognition and enforcement theme looking at the dynamic around relevant texts, ranging from the European Insolvency Regulation, Preventive Restructuring Directive and other conventions and model laws of possible application. The third plenary, on “Harmonisation of Transactions Avoidance Law” offered an insight into a Model Law, devised by Reinhard Bork (University of Hamburg DE) and Michael Veder (RESOR; Radboud Nijmegen NL), to address the cross-border situation of transactions avoidance, which might feature in the forthcoming Insolvency III initiative. Ending the first day, the fourth plenary on “Anti-Fraud Forum: The Dangers of Cyber-Attacks” offered a fascinating insight into a contemporary challenge to business operations with notable statistics including the fact 1 in 5 businesses reporting cyber-attacks with an insolvency risk.

Resuming events on Saturday 7 October 2022, delegates were welcomed back to the keynote by Fabris Peruško (CEO, Fortenova) giving some impressive statistics on the case of Agrokor: a EUR 7.8 billion bankruptcy whose debt was equivalent to 15% of Croatia’s GDP. The group was reorganised, though keeping similar trading names, under overall Fortenova umbrella, and today, Agrokor remains the largest regional retailer, beverage group, edible oil producer and meat producer. The fifth plenary session came in two halves, the first featuring Richard Snowden LJ speaking of contemporary developments and changes in “The Restructuring Regime in the UK”, while the second part, titled “To Sanction or not to Sanction, that is the Question” saw contributions from the UK, Croatia and Romania addressing the thorny issue of recognition and enforcement, with public policy, creditor challenges and costs etc. being considerations.

The sixth plenary session on “Hard and Soft Skills” saw contributors talk about the necessity to develop both hard job-specific skills and soft skills including empathy, problem solving, assertiveness and team working through experience and on the job performance. The Seventh Plenary Session on “Energy” addressed the current energy crisis sand the impact on business and consumers. For most, energy dependence was the critical issue with the RU-UA war leading to severe disruption across Europe, even for countries not directly dependent, but who are competing for supplies on the world market. 

Rounding off the day, the final plenary on “Harmonisation of Insolvency Laws in the EU” saw a karaoke Q&A session on progress in harmonisation within the EU with developments canvassed including the progress of transposition of the PRD and key developments in the work of the Experts Group that might be seen in the new Insolvency III initiative. 

Closing remarks were then provided by Frances Coulson (Wedlake Bell UK), Jelenko Lehki (Lehki Law Office HR) and Frank Tschentscher (Deloitte DE). Delegates were bid farewell till the next occasion, whether in May in Vilnius (EECC) or October in Amsterdam (Main and Academic Conferences).

An in-depth report can be downloaded here.
18 August 2022

INSOL Europe’s Chief Executive Officer, Paul Newson, was invited to be the opening speaker at FILA’s tenth anniversary event in Helsinki, Finland, from 18-19 August.

The Finnish Insolvency Law Association (FILA) was founded in 2011 and brings together lawyers specializing in insolvency law, as well as other professionals working with insolvency issues. The Association has around 250 members, the majority of whom are attorneys at law who act as administrators in bankruptcies and reorganization cases.

Day 1: Hot topics of the day
The first day of the conference took place at the offices of Castrén & Snellman Attorneys in the centre of Helsinki, attended by over 130 delegates, and was opened by Tuomas Hupli, Chairman of the Board of the Association.

Paul’s presentation was entitled ‘Responding to Change’ and started by giving the delegates a background to INSOL Europe, including how members can get involved at all levels, whether by simply attending events or contributing to one of our many working groups and forums. During what was to be one of the hottest days ever recorded in the city, Paul moved onto some of the hot topics of our profession such as cross-border schemes and plans - how they work in different jurisdictions, and the harmonization of insolvency laws at EU-level. 

Paul then went on to relate the challenges that our profession is facing to the key topics to be discussed at the Annual Congress in Dubrovnik, reminding the audience that “Resilience is the ability to navigate adversity and to grow and thrive from challenges” according to the American psychologist Karen Reivich, and that on account of the current crisis, companies will have to adapt their businesses to cope with rising costs, supply chain challenges, and changing markets to be resilient. The way insolvency and restructuring professionals react to this crisis and aid their clients in dealing with the plethora of issues they are faced with in these uncertain times, will have a profound effect not only on individual businesses and their respective workforces, but on the economy at large.

Finally, Paul invited the delegates to find out more about INSOL Europe and how we are working to get a better understanding of this new landscape and what insolvency and restructuring professionals may be able to offer their clients, what tools they have at their disposal in their respective countries and what is in store in terms of future regulation.
The seminar continued (in Finnish) with a lecture by Jaakko Mikkilä (Supervisory Team Supervisor, Legal Unit, Patent and Registration Board) and a long and detailed history of the most peculiar bankruptcy cases in Finland by the legendary Eero Lyytikäinen, Bankruptcy Ombudsman Emeritus, who is allegedly responsible for creating the bankruptcy industry in Finland. The audience were certainly enthralled by the tales although as Paul’s knowledge of Finnish is very limited, he was unable to join in the jokes!

Rounding off the day’s lectures, FILA scholarships were handed out to recently qualified students before the delegates were released into the fresh air to enjoy some well-earned refreshments.

Day 2: The heat continues in Tallinn
After a short cruise to Tallinn, Estonia, the second day of the conference took place at the Tallink Spa Conference Hotel, in the harbour area of the town, on yet another day with record-breaking temperatures.

Lectures continued in Finnish by Pekka Puolakka, EY Law Baltics Managing Partner, Tallinn on “Bankruptcy and related disputes, the good, the bad and the ugly of the late 1990s and early 2000s”; “Insolvency vs. imminent insolvency in restructuring of enterprises” was covered by Tuomas Hupli (Faculty of Law, University of Turku and Chairman of FILA) and lastly “Self-incrimination protection” by Professor of Procedural Law Mikko Vuorenpää (Faculty of Law, University of Lapland). Tuomas Hupli then closed the day’s proceedings and thanked everyone for attending.

Paul Newson would like to thank Olli Rantanen (Head of Legal Services, Domestic Financing at Finnvera plc, Oulu Area, Finland; COO of FILA) and Tuomas Hupli (Chairman of FILA) for the opportunity to attend the conference, and Jan Lilius (Hannes Snellman Attorneys Ltd; Country Co-ordinator for INSOL Europe) for facilitating the arrangements and helping with the Finnish translations on the day!