Inside Stories


INSOL Europe's Inside Stories are all written by our members, experts in their fields and their regions within Europe. Every month these stories are published in our e-newsletter which are emailed to our membership. The articles are topical and provide real insight into cases and points of law. If you would like to send in an Inside Story, please email Paul Newson. We hope you enjoy the collection below.
 
2019

June 2019 - Anticipating the Directive: Is France Prepared?
The Preventive Restructuring Directive was adopted recently on 6 June 2019 and now enters its transposition phase, during which member states will endeavour to ensure that its terms are transposed into national law. In France, the Loi Pacte has authorised the Government to legislate by means of an Ordinance, which it must do within 24 months of this law coming into force. Once the Ordinance has been published, the Government must table before Parliament a draft law seeking to authorise the Ordinance within a further 4 months. In a recent piece published in Eurofenix, Jean-Luc Vallens, former Magistrate in France assesses the likely reception for the Directive in France and its impact on the law and practice there. Download the full story here.
May 2019 - Jurisdictional Conflict in a Recent Estonian Case
By its order of 10 October 2018, the Supreme Court of Estonia refused permission to appeal in Civil Matter No. 2-17-17487, thereby approving the order of the Tallinn District Court dated 27 July 2018. In this matter, the bankruptcy of an individual was declared in Estonia, despite the fact that the debtor argued that his centre of main interests (“COMI”) was in the United Arab Emirates. The Estonian courts took the position that the debtor could not rely on the Recast EIR in cases where the COMI of the debtor lies outside the EU. As a result, the Estonian courts declared the bankruptcy of the debtor in Estonia by applying the Estonian Bankruptcy Code and the Code of Civil Procedure without determining the COMI, relying on the argument that the debtor lived in Estonia. Overall, the outcome is unusual. On the one hand, Estonian courts found that COMI was outside the EU and that the EIR was inapplicable, but, on the other hand, they nonetheless opened a main insolvency procedure in Estonia by declaring the bankruptcy of the debtor in Estonia. Anto Kasak, Partner, Advokaadibüroo Kasak & Missik, Tallinn reports on this contradictory case. Download the full story here.
April 2019 - The Recent ECB Intervention in Italy: An Assessment
The financial crisis triggered by the collapse of Lehman Brothers (2008) had a significant impact on the stability and solvency of Italian banks. In Italy, the banking crisis emerged at a later stage than in other European countries. This is primarily due to the nature of the investments carried out by Italian banks. To generate profits, Italian banks have traditionally been dependent on loans for commercial activities and state obligations. They have been less reliant than other Anglo-American and European entities on subprime loans. It was only with the economic crisis (and the consequential rise of non-performing loans) and the fall of interest rates by the European Central Bank (‘ECB’) that the stability of the Italian banking system was detrimentally affected. 
The deceitful and apparent solidity of Italian banks was signalled by the lack of significant cases of distress until 2012, when the Cassa di Risparmio di Teramo (also known as ‘Banca Tercas’) eventually filed for extraordinary administration, an insolvency procedure under Italian law. Eugenio Vaccari, Lecturer, Essex Law School details the case. Download the full story here.
March 2019 - Pre-Insolvency in Portugal: A New Legal Framework
In Portugal, through Law no. 8/2018, a new pre-insolvency instrument has entered into force: the regime of out-of-court corporate restructuring (in Portuguese, the “Regime Extrajudicial de Recuperação de Empresas” or simply the “RERE”). The RERE is an out-of-court recovery instrument which aims at achieving a voluntary, confidential and free content restructuring agreement through negotiations engaged by the debtor with all or only some of its creditors. Debtors who may resort to RERE are those in a state of near insolvency or with mere economic and financial difficulties (such as serious difficulty in complying with payment obligations due to lack of liquidity or access to credit), but capable of financially recovering. Exceptionally, during the first eighteen months after the text enters into force, a debtor in a situation of insolvency may resort to RERE as long as it has not yet been declared insolvent by a Court. Nuno Gundar da Cruz and Catarina Martins Morão detail the use and implementation of the new RERE procedure. Download the full story here.
February 2019 - New Rules for Cross-Border Recognition in Switzerland: A More Facilitative System
When Switzerland enacted its new code on private international law in 1989, containing a section on the recognition of foreign insolvency proceedings, Switzerland was one of the first countries to abandon the predominant principle of territoriality. More than thirty years later, with other legislative models in force, such as the EU-Directive, or the UNCITRAL Model Law, it was time to modernize Swiss international Insolvency Law and to abandon some obstacles hindering the recognition of foreign insolvency proceeding in practice. Yet, the new law that came into force on 1 January 2019 is not revolutionary... Professor Dr Daniel Staehelin and Dr Lukas Bopp of Kellerhals Carrard, Basel, Switzerland, take up the story. Download the full story here.
January 2019 - Terminating Insolvencies in Hungary: Potential Problems in the Legislation
The recent amendment to the Hungarian Insolvency Act (HIA), which entered into force in July 2018, concerned a seemingly minor issue. The newly implemented provision, section 26(3b) of the HIA, makes it possible to terminate the liquidation proceedings even after the delivery of the final decision opening of the liquidation proceedings (but prior to the publication of the liquidation in the Official Gazette) without the consent of the creditor who initiated the liquidation proceedings. The precondition of such “extraordinary termination” is that the debtor provides proof of having paid the debt underlying the final court decision opening liquidation to the creditor. Zoltán Fabók, Counsel, DLA Piper Budapest and Fellow, INSOL Global Insolvency Practice Course, takes up the story which has provoked strong responses even in the “mainstream” media. Download the full story here.
2018

December 2018 - Liability of Controllers and Insolvency Risks in Russia: The Case of Dalnyaya Step LLC and HSBC
The insolvency case of Dalnyaya Step LLC (Dalnyaya Step, debtor) is well known both in Russia and abroad, particularly in the United Kingdom. It is unique for several reasons. First of all, the case spans across a decade, having started in 2006, closed in 2007 and reopened in 2015 (still pending). Secondly, the Russian insolvency proceedings were first recognized in the UK in 2016, only to have the recognition order set aside ab initio in 2017 on public policy grounds. Thirdly, in August 2018, the Russian Supreme Court refused to approve the settlement agreement reached between the liquidator of Dalnyaya Step and HSBC Bank LLC (HSBC Bank), a Russian entity affiliated with HSBC Bank PLC, and found the latter liable for the debtor’s insolvency with liability exceeding EUR 16 million. This Inside Story by Ilya Kokorin (of Counsel, Buzko and Partners, Russia; Lecturer, Leiden University) will analyse this recent decision of the Russian Supreme Court and describe the potential risks it entails for members of corporate groups and banks serving their interests in Russia. Read the full story here.

November 2018 - Latvia: Examinership in Cyprus: A missed opportunity
As part of the new insolvency framework enacted in Cyprus in May 2015 following the near collapse of the economy, the concept of Examinership was incorporated into the Cyprus Companies Law Cap 113, a procedure largely based on Irish legislation. Examinership is a debt restructuring and corporate rescue mechanism for companies which are insolvent or likely to become insolvent but have reasonable prospects of success as a going concern. Following the filing of the petition together with an Independent Expert’s Report, the company gains the protection of the court for 4 months (extendable to 6 months). The purpose of the stay is to give a company a period of protection from its creditors, in order to facilitate its survival as a going concern and to save viable businesses and jobs. Andri Antoniou, director at CRI Group, a firm specialising in all aspects of corporate recovery reconstruction and renewal in Cyprus. Read the full story here.

October 2018 - Latvia: The Newest and Best Insolvency Law in Europe?
At the INSOL Europe event in Riga in May 2018, the Latvian Justice Minister boasted of the newly overhauled Latvian Insolvency Law, which supposedly now forms “the best regulation in Europe”. That prompts the question whether the new Latvian regulation is indeed an exemplary feast or whether the statement was an exercise in promoting an appreciation of the Government’s (and the Minister’s own) work. It is true that, over the past few years, the Latvian government has been trying hard to bring about a clean-up of the realm of insolvency and to deliver a decisive blow to wide-spread abuse and unlawfulness associated with insolvency proceedings in Latvia. This concern reflects in part the alarm bells sounded by the European Commission, the World Bank and other international institutions about the state of the insolvency environment in Latvia. Their view has been that rapid action is desperately needed to improve the business climate in Latvia. Even the Foreign Investors’ Council, a Latvian organisation, declared prominently in 2016 that some Latvian insolvency administrations have too close a connection to the world of organised crime. Indulis Balmaks, Lawyer with Rödl & Partner in Riga, examines the evidence here.

September 2018 - Positive Outcome for the Agrokor Case agreed after Legal and Political Moves​ 
On 4 July 2018, a temporary creditors’ council adopted the settlement agreement, marking the end of the first phase of the extraordinary administration procedure involving the Croatian Agrokor Group. A majority of creditors with claims amounting to 80.2% of the total debt agreed to the proposal submitted by the extraordinary commissioner. The Commercial Court in Zagreb subsequently confirmed the creditors’ settlement agreement in its decision dated 6 July 2018. Since the extraordinary administration procedure started over the Agrokor Group in April 2017, this case has become the most significant economic and political issue in Croatia and the West Balkans region. With over 60,000 employees and assets estimated as worth some EUR 7.1 billion, the group was considered “too big to fail”. That is why the Croatian Parliament adopted a special Law on “a procedure of extraordinary administration in companies of systemic importance” on 6 April 2017 in order to save the company, the text immediately being dubbed the Lex Agrokor. Its purpose was chiefly to avoid ordinary bankruptcy proceedings being opened over companies in the Agrokor group. Djuro M. Djuric and Vladimir M. Jovanovic outline the case here.

July 2018 - Recognition under the Model Law in the UK 
This case is about an Azeri (Azerbaijan) law restructuring proceeding and restructuring plan (which under Azeri law binds all creditors), and the position in relation thereto of two creditors under instruments governed by English law. The Azeri proceedings were recognised in England and Wales under the UNCITRAL Model Law, and such recognition carried with it a moratorium. The dispute before the English court was whether the moratorium should be lifted in favour of the two creditors in light of the rule in Antony Gibbs & Sons v La Société Industrielle et Commerciale des Métaux (1890) LR 25 QBD 399 or instead continued on a (near) permanent basis to give effect to the Azeri law restructuring plan. On 18 January 2018, the English Court decided not to impose a stay on any actions that the two aforesaid creditors might take. It follows that the English Court rejected a continuation of the moratorium. The practical effect of the English Court’s decision is to effectively deprive the Azeri law restructuring plan of any effect in England and Wales as regards the two creditors whose debts arose under English law instruments. Stefan Ramel, Barrister, Guildhall Chambers, Bristol reports on the case here.

June 2018 - The Development of Insolvency Law in Kosovo
Following the end of the Kosovo war in 1999, the country’s governing structures including its banking system had collapsed. The rush to establish legal frameworks and governing mechanisms caused gaps in various areas. One of those areas was insolvency proceedings. Four years after the war ended, in 2003, the provisional Self-Government of Kosovo adopted the UNMIK Regulation No. 2003/7 on Liquidation and Reorganization of Legal Persons in Bankruptcy. In 2016, this Regulation was replaced by the Law on Bankruptcy, which was adopted by the Kosovo Parliament. This law has been harmonized with EU Regulation 2015/848 on insolvency proceedings (recast). The new Law on Bankruptcy includes many features left out by the previous regulation. The adoption of this law was positively evaluated, as a result of which Kosovo improved its position in the World Bank Doing Business Report, jumping from 163rd to 43rd place. In addition, in March this year, the Parliament of Kosovo adopted the new Law on Business Organizations, which regulates bankruptcy and insolvency proceedings for limited liability companies, joint stock companies, the enforcement of creditor claims on a limited liability company subject to voluntary dissolution as well as protection of creditors upon a cross-border merger. Yet, the enforcement of the new laws remains questionable, leaving interested parties confronting unwritten practices in the context of different insolvency procedures. Drini Grazhdani, Legal Specialist, USAID/Millennium DPI Partners, Justice System Strengthening Program in Kosovo; Lecturer, European College Juridica writes this month's Inside Story. Download the full story here.

May 2018 - When Bitcoin meets Insolvency: Is Bitcoin Property? Dutch and Russian Responses
The capital structures of companies in the 21st century will be starkly different from those of the last century. Once driven by hard assets, such as real estate, natural resources and machinery, modern businesses have become highly dependent and valued mostly on the basis of intangible assets – contracts, intellectual property and goodwill. Recent years have seen a rapid development of new technologies allowing for the creation of novel types of intangible assets with their own value and characteristics. There is hardly anyone these days who has not heard about Bitcoin or cryptocurrencies in general. As the world’s first decentralised digital currency, Bitcoin has become possible thanks to the blockchain technology – based on publicly distributed, shared and immutable digital ledgers. Anonymity and irreversibility of transactions on blockchain have made it attractive for users.

A lot does, however, depend on public perception (i.e. trust) and government reaction. The latter so far has been rather mixed. Among rising fears of the technology being used for illicit activities (money laundering, extortion, financing of terrorism, etc.) and weak investor protection, state authorities struggle to find a balanced solution. But while regulatory and legislative bodies take their time to establish legal frameworks for the operation of the crypto market, courts have no such time and are faced with the need to expeditiously resolve real disputes. This is particularly so in the context of insolvency cases, in which several questions may arise. For instance, how to treat various types of digital assets belonging to the debtor, how to trace them in cases where the debtor refuses to disclose their existence, transfers them to third parties or simply refuses to provide access to the insolvency practitioner or court? And lastly, how to dispose of them and at what exchange rate, if any?

This Inside Story by Ilya Kokorin (of Counsel, Buzko and Partners, Russia; Lecturer, Leiden University) follows two recent cases, one from Russia and the other from the Netherlands, where the courts considered whether Bitcoin constituted ‘property’ and could provide a valid legal ground to initiate insolvency proceedings. Download the full story here.

April 2018 - Implementing the Recast EIR: Potential Problems in the Hungarian Legislation
Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings has been replaced by Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) on 26 June 2017 (“Recast EIR”). The Recast EIR has not revolutionised European insolvency law. Instead, it codified the case law produced by European courts in the last more than one decade and addressed some further issues that emerged since the entry into force of the 2000 EIR. Notwithstanding, the Recast EIR undoubtedly made it necessary to adjust the domestic insolvency regimes on some points. The Hungarian Parliament adopted some amendments (“Amendments”) to the Hungarian Insolvency Act (“HIA”) in October 2017. The purpose of the new legislation is to harmonise the domestic insolvency framework with the new provisions of the Recast EIR. While, admittedly, the legislative proposal went through significant improvements before adoption, there are still several legislative solutions that should be criticised. In this piece, some of those issues are pointed out by Zoltán Fabók, Counsel, DLA Piper Budapest; Fellow, INSOL Global Insolvency Practice Course. Download the full story here.

March 2018 - Italian Insolvency Reforms: Comments on the Feb. 2018 draft Legislative Decree
During the past three decades, the gradual and fast tendency of the markets to “globalization” have determined the recent tendency of States to adopt legal provisions dedicated to the prevention of financial crises and to avoid insolvencies of market operators. In fact, the adoption of such measures is today one of the essential elements in the determination of international ratings for the evaluation of the integrity of internal market. “Predictability” and “risk management” have gradually become common words, essential for the prevention of crisis, opening also the possibility for entrepreneurs to have a second chance and remerge in the markets after a “dark night” period. In this particular context, therefore, an efficient system for the resolution of issues related to insolvency becomes an essential task for a State in order to guarantee the right balance to the internal market of a country, also with the scope of attracting foreign interested investors and implement the economy. To this extent, various States, including Italy, have recently started to move towards reform projects of insolvency law, in order to facilitate and speed up, efficiently, the approach to insolvency issues. Carlo Ghia, Partner, Studio Ghia Legale, comments on the reforms. Download the full story here.

February 2018 - A Second-Chance for Consumers in Cyprus: Reorganisations go Virtual
In the last few decades the promotion of a corporate rescue culture has been a key objective for many EU jurisdictions, but particularly since the 2008 financial crisis, corporate rescue has been at the top of the agenda. Although the significance of corporate rescue is not to be underestimated, it can be argued that consumer bankruptcy carries no less significance. The adverse impact of consumer bankruptcy has been intensely experienced at very large scales in countries like Greece and Cyprus. However, as opposed to the sporadic attempts that were made in the shadow of the financial crisis in Greece, Cyprus appears to have approached both corporate and consumer reorganisation in a more methodical manner and has noticeably placed greater emphasis on laying the foundations of a strong second-chance culture. This Inside Story by Alexandra Kastrinou, Senior Lecturer, Nottingham Law School (UK) looks at the steps taken in Cyprus to improve the position of consumer debtors and offers a brief overview of the recently introduced legislative framework, which is now bedding into use following the introduction of an Interactive Reorganisation Tool and accompanying Guide in January 2018. Download the full story here.

January 2018 - Cross-Border Assistance in Guernsey: Recent 2017 Cases
In a cross-border insolvency, there are likely to be international elements that present themselves during the course of local proceedings in circumstances where an 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. Download the full story here.
2017

December 2017 - Navigating Extensive and Complex Restructuring Processes in France
CGG SA is the holding company of the CGG Group, one of the leaders in the geophysical and geological services industry in the world. The CGG Group provides a wide range of services for the acquisition, the processing and the interpretation of seismic data. Its clients are mainly oil and gas companies using seismic imaging as a support for exploring and developing their reserves, to whom the group provides the means for a comprehensive understanding of subsurface targets and their geological settings. The CGG Group has experienced problems in the past few years, leading to its consolidated turnover dropping from USD 3.766 billion (2013) to USD 1.196 billion (2016). Accumulated consolidated losses over the past three years totalled USD 3.170 billion. The inevitable need for a restructuring process also led to one of the most important cases seen in France in recent years for the financial, economic and social issues it contained. Hélène Bourbouloux, Administrateur Judiciaire in Paris, reports on the case. Download the full story here.

November 2017 - Directors’ Duties in Jersey: In it for the Long Haul!
The island of Jersey, along with most other international financial centres, offers a range of services to the corporations and individual who wish to take advantage of the benefits of doing business offshore. Among the most important sectors is the provision of corporate services, typically including a package of accounting, administrative and statutory filing services. More often than not, that package might also include providing local corporate or individual directors to supervise and manage complex offshore structures. Some of the latest legal analysis may have originated overseas and is familiar to most practitioners, but 2017 has seen one case with a particular Jersey gloss which will be relevant to professional directors in Jersey of whatever standing. Download the full story here.

October 2017 - A Developing Threat to West Balkan Economies: The Agrokor Insolvency
After the Greek economic and migrant crises, since April 2017, the Agrokor case has become the main concern for the governments of the states of the former Yugoslavia. Once the biggest Croatian company and economically very significant, it has become a serious problem for the Croatian Government. Its systematic importance for the country and the region recently required a legislative solution to be found for its problems. Dr Djuro M. Djuric and Dr Vladimir M. Jovanovic discuss the Agrokor case, an example of the rise and fall of a former Yugoslavian company which was, in many ways, granted privileges by the state, even though it was privately owned. Download the full story here.

September 2017 - Risks for Insider-Financed Restructurings in Russia
The first port of call in upstream restructurings is often the shareholders, particularly in private (closed) corporations, where the intention is to privilege the investment of a select few. When these companies contemplate restructurings, often they may be unable to obtain or extend conventional lending. Furthermore, the risk for the entrepreneurs from external (white knight) investment and the dilution of their capital may be something they are keen to avoid. In such situations, “recapitalizing” the company through soft loans is seen as a solution avoiding the need for greater investment in the equity. However, the issue is how these arrangements are treated should the company subsequently be unable to avoid formal insolvency proceedings. In a number of legal systems, such lenders are treated as “deferred” creditors, while, in others, they may be excluded entirely from the category of estate creditors. The risks for internally-financed restructurings are thus high if they do not work out. Ilya Kokorin reports. Download the full story here.

June 2017 - Avoidance actions and good faith: what to observe when doing business with Lithuanian companies
Recent Lithuanian case law confirms that businesses ought to be very cautious and take active steps before entering into transactions with Lithuanian companies potentially facing difficulties. Otherwise, they risk having to return what they received from the transaction if insolvency proceedings are opened against the company and the administrator brings a claw-back claim. Lithuanian insolvency administrators examine transactions of the debtor concluded within 36 months before the opening of the proceedings. They must start avoidance actions against the debtor’s counterparty if the conditions for an actio pauliana claim are met. Frank Heemann and Karolina Gasparke​ explain the details. Download the full story here.

May 2017 - Great opportunity for creditors, debtors and investors in Polish bankruptcy law
Starting from 1 January 2016, there is an exceptional way of acquiring businesses in crisis in Poland. This opportunity is pre-pack, introduced to Polish law by the Restructuring law, which significantly amended Insolvency law, adding i.a. Articles 56a – 56h, regulating pre-packaged liquidation. A pre-pack motion can be filed in the Bankruptcy Court together with a motion to declare bankruptcy, but can be also a separate motion, filed either by the debtor in crisis or the personal creditor. What is more, the debtor’s pre-pack motion may be an answer for creditor’s motion to declare bankruptcy. Karol Tatara and Mateusz Kaliński explain all. Download the full story here.

April 2017 - The fall of an economic colossus in Czech Republic
Of the about 15,000 insolvency procedures which are initiated in the Czech Republic in any given year, the overwhelming majority is actually conducted against private individuals seeking debt relief or against small entrepreneurs in the form of bankruptcy proceedings. But once in a while, a debtor comes on the stage of insolvency who can (or, in fact, has to) be saved, at least partially. It is in those ten or so cases every year that the debtor's insolvency is being resolved by imposing a restructuring, or “reorganization”.  David Fechtner, advokát / attorney-at-law in Czech Republic, explains why reorganization of debtors should only be attempted when it makes economic or social sense. Download the full story here.

March 2017 - The clash between criminal procedure and insolvency in Romania
For a couple of years now, the precautionary measures established during the criminal trial have given Romanian insolvency practitioners, judges, debtors and creditors a headache. In the first semester of 2015, the number of insolvency procedures which involved criminal precautionary measures against the debtor’s assets were as low as 75. A year later, from a total of 29,365 number of insolvency procedures, 377 of them involved criminal precautionary measures. At the end of 2015, the turnover of these debtors with assets encumbered by criminal precautionary measures amounted to 0.55% of the GDP. In this report, Niculina Somlea briefly explores the precautionary measure ‘sequestration’. Download the full story here.

February 2017 - Paymill GmbH: Reorganisation by Transfer in Germany - Munich start-up sold to new investor three months after provisional debtor-in-possession insolvency is ordered
Following successful provisional debtor-in-possession insolvency proceedings led by attorney Vincenz von Braun and a team from anchor Rechtsanwälte working in close collaboration with the provisional insolvency monitor, attorney Dr. Christian Gerloff (Gerloff Liebler Rechtsanwälte), Munich financial technology start-up Paymill GmbH has been transferred to the Swiss investor, Klick & Pay, in what is known as a reorganisation by transfer. Under the terms of the reorganisation, the company's management had to make only 18 of the original 65-strong workforce redundant. Florian Pfoser and Vincenz von Braun of anchor Rechtsanwälte Partnerschaftsgesellschaft mbB, Mannheim (Germany) take up the story. Download the full story here.

January 2017 - Turkish Courts change their approach to the delicate balance of protecting matrimonial homes
The Turkish Constitutional Court recently considered a claim seeking to remove a lien in favour of a bank, which the plaintiff’s spouse had placed over the “matrimonial home” without her consent. Traditionally, Turkish courts have ruled in favour of banks on this topic, reasoning that if the matrimonial home right is not annotated on the title deed, a bank’s good faith must be protected. However, an April 2015 decision by the highest body within the Court of Cassation changed this reasoning, instead placing the onus on banks to act as prudent merchants and undertake necessary examinations of the relevant real estate to determine whether it is a matrimonial home. Orçun Çetinkaya, Burak Baydar, and Hande Gurel of Moroglu Arseven, Istanbul, report on the case. Download the full story here.
2016

December 2016 - The insolvency of Dutch retail chain Etam Groep and the position of suppliers
In the last two years quite a lot of Dutch retail chains have gone bankrupt. To name a few: Free Record Shop, Van Leest (music stores), DA (drugstore), Scapino, Dolcis, Manfield, Schoenenreus (shoe stores), Aktiesport, Perry Sport (sportswear), Mexx (fashion store) and, of course, V&D (the renowned warehouse). In this Inside Story, Ruud Brunninkhuis of Buren N.V.​ (The Netherlands) highlights the insolvency of another Dutch retail chain, Etam Groep. Download the full story here.

November 2016 - The Curious Case of Vladimir Kekhman, and Treatment of Foreign Insolvencies in Russia
A well-known Russian businessman Vladimir Kekhman successfully sought a bankruptcy order in the UK back in 2012, but despite that fell under the Russian insolvency procedure in 2015. Russian courts, including the Supreme Court of the Russian Federation, reasoned that foreign insolvency did not prevent Russian courts from hearing the case under the Russian insolvency law. Russian citizens do not initiate insolvency proceedings outside Russia regularly, and the case of Mr. Kekhman in this respect is exemplary in viewing a larger picture related to the treatment of foreign insolvencies in Russia. Ilya Kokorin (Buzko & Partners, St. Petersburg, Russia) explains the history behind this case. Download the full story here.

October 2016 - Snooze and you lose in Slovakia
A recent decision of the Slovak Courts suggests that if main proceedings have been opened in one member state and the debtor has assets in Slovakia, the insolvency practitioner in the main proceedings must act quickly and sell those assets before secondary proceedings are opened in Slovakia, otherwise he runs the risk of losing the assets to the secondary estate. Legal title to the assets must have passed to the buyer before the secondary proceedings are opened; it is not enough just for contracts to have been exchanged. If title has not passed when the secondary proceedings are opened, then the subsequently appointed Slovak trustee must ratify the transfer to avoid its validity being challenged in the future. Silvia Belovicova and Alexandre Le Ninivin of Squire Patton Boggs, Slovakia, explain all. Download the full story here.

September 2016 - Abengoa insolvency proceeding, Spain
In the beginning the Spanish multinational Abengoa was a problem for its financial creditors… then it was a legal issue… and now actually it is both things. Abengoa has two main problems. Firstly, it has a debt of €10,000 million and secondly, it needs at least €1,200 million to keep the business in operation. Mariano Hernandez​​ from Barcelona explains the situation. Download the full story here.

August 2016 - Schoeller Electronics GmbH, Germany
Schoeller Electronics GmbH, the printed conductor boards manufacturer located in Hesse has been sold to a new owner under the supervision of Rechtsanwalt Alexander Reus and his team from anchor and Dr. Jan Markus Plathner from Brinkmann  & Partner as custodian. The insolvency ended in a so-called dual track procedure in which Schoeller was acquired by the American investor AIAC. The insolvency procedure was used to refocus the company for the future. Dr. Christof Schiller takes up the story.​ Download the full story here.

June 2016 - A story of troubled retailers in Russia
According to statistics provided in the Competition Development Bulletin “Concentration on the Russian Markets: Trends in the Period of Recession” published in December 2015 by the Analytical Centre of the Government of the Russian Federation, the period from the 2nd quarter of 2013 to the 1st quarter of 2015 saw an upward trend in the number of insolvencies in the construction, real estate, retail and wholesale sectors of the Russian economy. In December 2014, 295 companies were in insolvency proceedings. By March 2015, the number of insolvencies had increased to 348 companies. Based on information provided by the analytical company “Nielsen”, in the 1st quarter of 2016 the index of consumers' trust was the lowest during the last 11 years. Sergey A. Treshchev, Partner, International Dispute Resolution, Squire Patton Boggs, Moscow (Russian Federation) reports. Download the full story here.

May 2016 - Czech Republic: Frivolous insolvency motions
According to a ruling by the Czech Supreme Court, filing a motion for the initiation of insolvency proceedings on the basis of knowingly false information (i.e., what is known as a "frivolous insolvency motion") may qualify as a criminal offense – that of defamation.  If the knowingly false insolvency motion moreover serves to coerce a third party (who is otherwise not bankrupt) into taking certain actions (such as making payments towards the party who filed the motion), the elements of the criminal offense of extortion may also be met. In this sense, filing a frivolous motion for insolvency may not only have civil-law consequences but also criminal-law consequences for the applicant. Mgr. David Fechtner (David.Fechtner@bnt.eu), Associate, bnt attorneys-at-law s.r.o., Prague (Czech Republic) reports. Download the full story here.

April 2016 - The Netherlands: Modulus Group
In November 2015, real estate developer Modulus Vastgoedondernemingen B.V. filed a winding-up petition. Just days after Modulus Vastgoedondernemingen went into liquidation, 45 of its subsidiaries followed suit. A delayed casualty of the real estate crisis, the high-profile Modulus Group liquidation poses specific challenges for the receivers. Since the remaining value of the company is almost exclusively held up in mortgaged real estate, managing a controlled liquidation of those mortgaged assets is an important part of the proceedings. Also the fact the group consists of 45 legal entities makes for a challenging liquidation with interesting (fiscal) complications. With this Inside Story, Rik Buitenhuis of receivers Udink & De Jong (The Netherlands) gives an insider’s perspective in the proceeding focusing on the Modulus Groups Mortgaged assets. Download the full story here.

March 2016 - The Principle of Confidentiality
In a recent French case law related to a company facing a “conciliation” proceedings, the French Supreme Court (the “Cour de cassation”) has been confronted to a conflict between, in one part, the confidentiality principle governing the pre-insolvency proceedings as mentioned in the Act (Article L 611-15 of the Commercial code) and, on the other part, civil liberties as such the freedom of the press and the freedom of speech. Georges-Louis Harang of HOCHE SOCIETE D’AVOCATS, Paris (France), asks: Which one should prevail on the other? Download the full story here.

February 2016 - Orders for sale of properties in Europe: a helpful reminder
Sarah May and Graham McPhie of Moon Beever Solicitors, London (UK) write on a recent decision which serves as a reminder that it is essential to choose the correct jurisdiction in which to issue proceedings for sale of a property in Europe. Komu & Others v Komu & Another - the facts: The three claimants and two defendants all lived in Finland. Together they were joint owners of two properties in Spain. The claimants had issued proceedings in Finland for the properties to be sold, on grounds equivalent to the UK’s Trusts of Land and Appointment of Trustees Act 1996 which a UK Trustee in Bankruptcy would use to seek possession and sale of a property. The three claimants wished the properties to be sold and the proceeds distributed in accordance with already established beneficial interests. Under Finnish law if they disagreed as to whether the properties were to be sold they had to apply to Court, as is the position in England. Download the full story here.

January 2016 - UK: Insolvency Practitioners’ fees in England and Wales​
Chris Laughton writes on the new fees regime for Insolvency Practitioners (IPs) in England and Wales which changed with effect from 1 October 2015 as a result of the Insolvency (Amendment) Rules 2015. The underlying reasons for the change include a perceived failure on the part of IPs properly to communicate the value of the work they did and apparent excesses by a minority of IPs. Historically, the creditors’ committee, the creditors or the court would approve the basis of an IP’s remuneration. That basis was most likely to be time costs, although fixed fees and percentages were also permitted. Once the basis was approved, IPs paid themselves from the assets. The principal control was that affected parties could object to the level of the IP’s fees by applying to court. Download the full story here.
2015

December 2015 - Germany
Carlsson, an international luxury brand and the challenge of insolvency

Download the full story here.

November 2015 - Sweden
Meltdown in Swedish peer-to-peer lending company on the rise

Download the full story here.

October 2015 - Germany
DAF Deutsches Anleger Fernsehen AG

Download the full story here.

September 2015 - Spain
La Seda de Barcelona

Download the full story here.

August 2015 - Ireland
Irish Supreme Court Strengthens Lenders’ Security
 
Download the full story here.

July 2015 - Greece
Do we need to fear a Grexit?

Download the full story here.

May 2015 - Slovakia
Quick and (un)reasonable – Amendment of Slovak Bankruptcy and Restructuring Act

Download the full story here.

April 2015 – France
Re-energising the French Economy: Mission Impossible?
 
Download the full story here.

March 2015 – Spain
Merry-Go-Round of Amendments to the Spanish Insolvency Law: Setback to sale of productive units

Download the full story here.

February 2015 – Greece
Recent attempts by the Greek government to deal with the mounting NPL problem

Download the full story here.
Latest News

​EU Directive on preventive restructuring frameworks: now adopted

On 6 June 2019 the European Council formally adopted the directive on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures…

INSOL Europe holds panel at the III International Insolvency Forum Conference, 15-17 May 2019, St. Petersburg

Report by Emma Inacio, INSOL Europe Technical Officer We are delighted to announce that INSOL Europe was invited to hold a panel at the III International Insolvency Forum which took place during the Annual…

Annual Congress 2019 - Copenhagen - Registration now open!

We are delighted to announce that registration for our Annual Congress in Copenhagen, Denmark, from 26-29 September 2019 is now open. 

INSOL International’s Foundation Certificate in International Insolvency Law

INSOL International is in the process of launching its new Foundation Certificate in International Insolvency Law, which commences on 1 September 2019. Enrolments on the course open on 1 March 2019.  …

Video

Annual Congress 2018: Athens