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News from INSOL Europe
30 January 2025
Pravo-Justice and INSOL Europe joined forces for a webinar on 24 January 2025 further to the implementation of the Directive (EU) 2019/1023 on Restructuring and Insolvency in Ukraine. Indeed, on 22 October 2024, the President of Ukraine signed the law No. 3985-IX adopted by the Parliament of Ukraine on 19 September 2024 amending the Bankruptcy Code and introducing a preventive restructuring framework aligned with the EU acquis. The webinar – reaching 154 registrations - focused on the lessons learned from the implementation of the Directive on Restructuring and Insolvency in France, Greece, Italy, the Netherlands and Romania to prepare the entry into force of the Ukrainian preventive restructuring framework.
Iryna Zharonkina (EU Project Pravo-Justice Enforcement and Protection of Property Rights Component Lead) welcomed the attendees and introduced our president Alice van der Schee, (Van Benthem & Keulen, The Netherlands) who presented our organisation as well as an update on the national implementations of the Directive on Restructuring and Insolvency and their assessment by the European Commission.
During three hours, Judge Luciano Panzani (Judicial Wing member, Italy), Stathis Potamitis & Vassilis Stergiou, (POTAMITISVEKRIS, Greece), Christophe Thevenot (Council member, Thevenot Partners, France), Paul-Dieter Cirlanaru, (Council member, CITR, Romania) and Judge Elsbeth de Vos (Judicial Wing member, High Court of Amsterdam, The Netherlands) shared insights from their practical experience within their respective jurisdictions in accessing preventive restructuring procedures, facilitating negotiations on preventive restructuring plans and getting restructuring plans designed and approved.
The discussions were brilliantly moderated by Oleh Vaskovskyi (Supreme Court Justice, Secretary of the Judicial Chamber for Bankruptcy Cases of the Commercial Cassation Court within the Supreme Court), Vladyslav Filatov (Director of Bankruptcy Department, Ministry of Justice of Ukraine) and Oleksandr Bondarchuk, (Head of National Association of Insolvency Trustees, Absolute Law Firm).
The Directive on Restructuring and Insolvency has been a milestone for the EU towards targeted harmonisation of Member States’ national insolvency laws in the area of preventive restructuring frameworks. Our joint event was the opportunity to evaluate the practical impact of the implementation of the provisions of the Directive on Restructuring and Insolvency in five Member States, exchange good practices and highlight issues, amongst EU and Ukrainian professionals that will guide the future of harmonisation of restructuring in Europe.
30 August 2024
The International Institute for the Unification of Private Law (UNIDROIT) has launched a consultation on its Draft Legislative Guide on Bank Liquidation. The Draft Legislative Guide has been developed by the Working Group on Bank Insolvency, a group of international experts from different legal systems, as part of the Bank Insolvency Project conducted by UNIDROIT in cooperation with the BIS Financial Stability Institute. The aim of the Draft Legislative Guide is to assist legislators and policymakers in designing effective bank liquidation regimes tailored to the special nature of banks and their role in society. The Guide focuses on “non-systemic banks”, thereby complementing existing international standards. Specifically, it provides guidance on frameworks for the orderly liquidation of (i) banks that are not placed under a resolution procedure compatible with the FSB Key Attributes, and (ii) parts of a bank following, or in the context of, a resolution action.
INSOL Europe has been invited by the Secretary-General of UNIDROIT, Prof. Ignacio Tirado, to give any feedback on the Draft Legislative Guide on Bank Liquidation, given its members’ expertise in this area. Possible comments may be submitted to the UNIDROIT Secretariat.
The consultation runs until 11 October 2024. All information regarding the consultation, including the text of the Draft Legislative Guide itself, is available on the dedicated consultation webpage. Should you have any questions, please do not hesitate to contact Ms Myrte Thijssen, the responsible Legal Officer for this project. We invite you to provide your feedback, if this falls within your area of expertise.
Please be aware that the Secretary-General of UNIDROIT, Prof. Ignacio Tirado, will be leading a panel on bank liquidation at our INSOL Europe 2024 Sorrento Congress on Friday 4 October from 17.00.
01 July 2024
Joint R3 & INSOL Europe International Restructuring ConferenceLondon, 27 June 2024
This illustrious joint conference returned to London for the 18th occasion since the collaboration between R3 and INSOL Europe began in 2003, writes Paul Newson, INSOL Europe CEO. Only the COVID-19 lockdown halted the series which was successfully relaunched in 2023.
On a very hot day in the capital, almost all of the 120 delegates who had registered for the (sold-out) event converged on the air-conditioned halls of 11 Cavendish Square for the annual event, which promised an international programme with a mix of hot-topics and updates from the best selection of speakers it was possible to squeeze into the programme. With delegates from jurisdictions such as France, the Netherlands and Germany, and as far afield as India and the US, the conference certainly has a big reputation to live up to.
The day began with quick introductions from the Conference Chair, our member Sebastiaan van den Berg (RESOR, The Netherlands) and Presidents of the associations jointly responsible for the event, Giorgio Corno (INSOL Europe, Italy) and Tim Cooper (R3, UK).
Following the well-established programme, the first session featured case law updates from Henry Phillips and Richard Fisher KC (Barristers, South Square London), who ran through the main points of the recent BHS case and discussed the question of fiduciary duty and miscreant trading vs wrongful trading. They also looked at the UNCITRAL Model Law in the context of recent multi-jurisdictional insolvencies, including famous crypto cases such as Three Arrows (BVI) and FTX (Bahamas). With regard to proprietary claims, directors’ sanctions and parallel proceedings, they thought things are working well in the UK, but not so well in the EU.
The next panel discussion picked up on this theme and featured cross-border restructuring experts Giorgio Corno (Studio Corno, Italy), Lindsay Hingston & Marvin Knapp (Freshfields Bruckhaus Deringer, UK) and our member Professor Omar Salah (Tilburg University, Netherlands), who discussed the growing trend in multi-process restructurings. Giorgio Corno observed that EU legislation requires minimum standards, not hormanisation as such, whilst Martin Knapp made the observation that, in terms of regulation and harmonisation, we are beginning to speak the same language across the EU, but with different accents.
In an enlightening panel on Artificial Intelligence (AI), John Willcock (Global Turnaround) invited AI expert Presley Warner (Sullivan & Cromwell) to give the audience a brief history of AI from its beginnings in the 1950s, through chess computers, spell checkers, spam filters and Amazon tracking your purchases and making selections based on your browsing history, through to the present day with ChatGPT and beyond. He explained that predictive tools such as these need immense amounts of data to provide simple results (with an equally immense need for power, some 100 times the energy use of a simple Google search) and, when they run out of data, that is when they start making things up, so what will happen when they have accessed all known data?
Machine learning will improve at an exponential rate that we can only imagine and consistently under-estimate, so there is plenty of scope for development and improvement. Presley wrapped up by answering John’s final question – when will we all be made redundant? – by reassuring us that probably never: AI is good at objective analysis, but humans will always be better at subjective analysis and looking at the wider picture, so the likelihood is that we will all use AI more rather than be replaced by it.
A highlight of the afternoon was the panel on sanctions of insolvent Russian-related entities, following the invasion of Ukraine by Russia in February 2022. Panel leader Enda Lowry (Teneo, Ireland) began by explaining the European Union legislative framework, implemented in order to effectively introduce the sanctions system, with case studies from Eoin O'Shea (CMS Cameron McKenna Nabarro, UK) on Petropavlovsk Plc (UK), our members Joanna Gasowski (Wolf Theiss, Poland) on Go-Sport (Poland) and Enda himself on GTLK (Ireland).
The final session of the day was the hotly anticipated appearance by our Judicial Wing member Lord Justice Snowden, who spoke from his vast experience on how to successfully get jurisdiction for international cases in the UK, emphasising the need for judges to talk to each other more to find common ground, adding that, in his opinion, they could reference the UNCITRAL Model Law more than they are doing currently.
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
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