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.
June 2024: Navigating Uncertainty in Belgian Insolvency: Technology-Driven Businesses and the Enigma of Software Licences
In today’s rapidly evolving business landscape, businesses find themselves at the intersection of technological innovation and geopolitical and economic turbulence. Despite the increased reliance on software systems and digital infrastructure, it remains peculiar that, in many EU Member States, there is still no clear framework for handling software licences in insolvency. 
     This Inside Story by Jente Dengler, Lead Lawyer, Insolvency Dispute and Resolution, DLA Piper UK, Brussels, Belgium, explores the enigma of software licences under Belgian insolvency law in a wider EU context, demonstrating the need to bridge the gap between legal frameworks and technological realities as to ensure that software assets receive the attention they deserve in times of financial distress. Read the full story here.

May 2024: Corporate Purpose vs Corporate Interest in Luxembourg Restructuring and Insolvency
The concepts of “corporate purpose” and “corporate interest” of a commercial company, whilst fundamental for corporate governance of Luxembourg companies, are not defined in Luxembourg law or jurisprudence. In this Inside Story, authors Sofia Polykandrioti and Michael Scott of Loyens & Loeff, Luxembourg explore these concepts with a focus on restructuring and insolvency situations by: (i) examining the features of each concept, (ii) considering which corporate body is responsible for assessment of the concepts, and (iii) discussing, in brief, the judicial assessment of the concepts when restructuring plans are being sanctioned. Read the full story here.
April 2024: “Forgive us our Debts”: Ecclesiastical Insolvency in Croatia
In December 2023, the first case of bankruptcy of an ecclesiastical institution in history of Croatia was in sight. Namely, the Commercial Court in Zagreb Croatian Financial Agency (FINA) initiated preliminary bankruptcy proceedings against the Diocese of Zagreb-Ljubljana of the Serbian Orthodox Church.
     The Serbian Orthodox Church has been present on this part of the territory of Croatia since the 16th century, when its first monasteries were founded. Later, the Kings of Hungary and Emperors of Austria granted them numerous privileges for the purpose of defence of the southern borders from the Ottomans. This Diocese has jurisdiction over Orthodox Christians in northern Croatia and Slovenia. In the 20th century, the church was at the centre of the war conflicts and suffered both human and material losses. The Serbian Orthodox Church in Croatia, Diocese of Zagreb-Ljubljana was registered in the Register of Religious Communities of the Republic of Croatia on 16 November 2004 with its headquarters in Zagreb-Ilica Str. 7/II.
     An important dispute between the Serbian Orthodox Church and the Republic of Croatia arose from the damaging of the palace of the Diocese in the Croatian capital of Zagreb at the beginning of the conflict in 1992, which led to judicial proceedings. The Diocese of Zagreb-Ljubljana of the Serbian Orthodox Church lost the case and had to pay a huge amount for procedural expenses. Since its account was blocked, the proposal for opening preliminary bankruptcy proceedings followed. However, by the hearing scheduled for determining the bankruptcy ground, the debt was paid and proceedings were closed.
     Read the full story here by Dr Djuro M. Djuric, Visiting Research Fellow, Martin Luther University, Halle-Wittemberg, Germany.
March 2024: Transposition of the Preventive Restructuring Directive into Ukrainian Law
On 9 November 2023, the Parliamentary Committee for Economic Development recommended the adoption of the Bill implementing the EU Preventive Restructuring Directive 2019/1023 (“Bill #10143”) at the first reading. The next day, the Cabinet of Ministers of Ukraine presented its own (alternative) bill on the same subject (“Bill #10228”). The imminent transposition of Directive 2019/1023 (“PRD”) into Ukrainian law is driven by several factors:
  1. Ukraine’s attainment of candidate status for EU membership in June 2023 mandates compliance with the PRD as part of the EU acquis; 
  2. Fulfilling conditions for micro-financial assistance in 2023, crucial during wartime, necessitates legislation aligning with PRD principles to enhance corporate bankruptcy and insolvency regimes, allowing for full debt discharge; 
  3. Transposition is integral to the Roadmap for Capacity-Building Activities designed to facilitate the implementation of the Code of Ukraine on Bankruptcy Procedures adopted by the Ministry of Justice in September 2023;  and
  4. The European Commission’s November 2023 emphasis on the imperative of enhancing Ukraine’s bankruptcy legislation further underscores the urgency of the transposition of the PRD. 
It is important to keep in mind that the conditions for providing micro-financial assistance for 2023 required Ukraine to implement the PRD by the end of 2023, and it appears that the country failed to meet that deadline. Given the complexity of preventive restructuring and Ukraine’s unique situation of having to transpose the PRD during wartime, the failure to meet the deadline is not surprising. What remains clear is that the transposition of the PRD will occur sooner or later, and the bills tabled in Parliament provide a certain idea of how the Ukrainian restructuring procedure may ultimately look.
     Read the full story here by Oleksiy Kononov, MSCA4Ukraine Post-Doctoral Fellow, Faculty of Law, Economics and Finance (FDEF), University of Luxembourg.
February 2024: A Second Chance… for the Second Chance Directive in Poland
Almost all of the European Union Member States have already implemented the Restructuring Directive, also referred to as the Second Chance Directive. Unfortunately, at time of writing, Poland is the only country which has failed to do so, although several drafts have so far been discussed.
     In Poland, a team of experts within the Ministry of Justice prepared the first bill which was subject to public consultations a long while ago. A lot of business organizations (also including the National Chamber of Insolvency Practitioners and the INSO Section of the Allerhand Institute), public entities as well as the courts submitted their positions on the draft. Later on, yet another draft was published, slightly changing its subject matter, by expanding the scope of the regulation, and thus requiring another round of consultations. Over the period of parliamentary elections in Poland in October 2023, Mateusz Morawiecki’s government sent this draft to the Parliament for consideration. However, the newly elected government of Donald Tusk decided in January 2024 to withdraw the draft bill and present it for further amendments. In summary, a lot of work has already been done, including the drafting of a very detailed report on the areas needed to be covered to ensure compliance with EU law requirements.
     Paweł Kuglarz and Mateusz Kaliński of Tatara and Partners, Poland, write about what should be covered and what should be changed in their Inside Story. 
January 2024: Small and State Funded – An Empirical Study of Liquidations in Scotland
There is a significant degree of uniformity between corporate insolvency law in Scotland and in England and Wales, with many key elements reserved to the UK Parliament. The same types of corporate insolvency procedure exist in both systems, including liquidation in its various guises: members’ voluntary liquidation (MVL), creditors’ voluntary liquidation (CVL) and compulsory liquidation (winding up by the court). Nevertheless, there are differences in the relevant laws and insolvency practice. This is reflected in the fact that compulsory liquidations have historically been more commonplace in Scotland than CVLs, but the opposite is true for England and Wales. There are also differences in adjacent areas of law, such as the law of debt and the law of secured transactions, with these having an impact on insolvency outcomes.
     Despite the contrasts between English law and Scots law and the availability of valuable data, there is a general absence of empirical analysis of corporate insolvency in Scotland. Consequently, the authors undertook a study to examine insolvent liquidations (i.e. CVLs and compulsory liquidations) for Scottish companies whose liquidations had their end point within a 12-month period. This enabled them to make a number of significant findings regarding the size of estates of liquidated companies, their lifespans and the duration of the liquidation procedures, as well as with respect to expenses, the role of state and the recoveries by various groups of creditors. 
     Read the full story here by Dr Jonathan Hardman, Senior Lecturer, University of Edinburgh, UK and Dr Alisdair MacPherson, Senior Lecturer, University of Aberdeen, UK.
December 2023: Parallel Dutch Schemes: New Possibilities for Cross-Border Group Restructurings
As has been extensively reported, on 1 January 2021, the wet homologatie onderhands akkoord (WHOA) went into effect in the Netherlands, and with it the ‘Dutch Scheme’ as the first Dutch restructuring plan. Surprisingly, the Dutch Scheme was initially used principally by small corporations. During the last year, however, larger national and multinational businesses have started using the Dutch Scheme as a vehicle for reorganization. Dutch Schemes have been increasingly used as parallel proceedings in multinational group restructurings, pending simultaneously with, for instance, proceedings in the United Kingdom and/or the United States. With the recent restructurings of Dutch shipping company Vroon Group (in which Jones Day advised the shareholders) and American-German Diebold Nixdorf and its subsidiaries (Diebold—in which Jones Day was involved as debtors’ counsel), case law on parallel proceedings is developing quickly. 
     In this update, Jasper Berkenbosch (Partner, Business Restructuring and Reorganization Practice, Jones Day, Amsterdam), Sid Pepels (Associate, Business Restructuring and Reorganization Practice, Jones Day, Amsterdam) and 
Roos Suurmond (Associate, Business Restructuring and Reorganization Practice, Jones Day, Amsterdam) discuss some recent developments regarding parallel Dutch Schemes. Read the whole story here.
November 2023: AGPS Bondco, Testing English Courts’ Flexibility and Ability to provide Imaginative Solutions to Cross-border Insolvency Issues
On the one hand, it is widely acknowledged that one of the ostensible objectives of the EU Insolvency Regulation was to prevent ‘forum shopping’ in the insolvency market.  The ‘recast’ Regulation toned down this goal, by focusing primarily on mechanisms to prevent fraudulent or abusive forum shopping. On the other hand, it is equally widely acknowledged that the English restructuring framework built its success by offering a flexible and adaptable mechanism to foreign companies to restructure their debt in the UK through schemes of arrangement.
     UK schemes have long been criticised for the absence of any provision to bind dissenting classes of creditors. The Corporate Insolvency and Governance Act 2020 (CIGA 2020), which made major changes to the UK’s corporate restructuring and insolvency laws, introduced a flexible ‘restructuring plan’ procedure (Part 26A plans), capable of cramming down not simply dissenting creditors, but also dissenting classes of creditors.
    Eugenio Vaccari (Senior Lecturer, Department of Law and Criminology, Royal Holloway and Bedford Colleges, University of London, UK; Co-chair, Insolvency Law Academy, India) sets out the facts in this case and analyses the solution. Read the full story here.
October 2023: Distribution in UK Corporate Insolvency - Who Gets the Pie?It has been over 20 years since data was analysed to assess the rate of return to creditors, specifically those unsecured, during corporate insolvency. The last similar research was by R3 in 2001. This Inside Story by Asad Khan (Doctoral Researcher, University of Nottingham, UK) provides an overview of a recent empirical study conducted by the author. 
     A company usually goes insolvent when it cannot satisfy its debts. There are around 20,000 corporate insolvencies in the UK every year. During distribution, fixed charge holders are repaid first, followed by provisions for expenses, preferential creditors, prescribed part contributions, floating charge holders, unsecured creditors and, finally, deferred claimants. 
     In 2001, R3 found that unsecured creditors received on average less than 7% repayment of debt and got nothing in over 75% of corporate voluntary liquidations (‘CVLs’). The research was based on surveys and is fairly dated. Arguably, there was a need to provide updated statistics that examines a creditor’s realistic prospect of repayment during insolvency. This may not only help parties assess their scope for returns and contract accordingly, but it could also help reveal areas for development to the regime. Read the full story by Asad Khan here.
September 2023: Pushing the Envelope in Times of War: Insolvency-Related Judgments and Ukraine’s Recent Insolvency Court Practice
Russia’s military aggression against Ukraine since 24 February 2022 not only dramatically changed the lives of millions of Ukrainians, but inevitably triggered the need ‘to move faster’ and re-adjust to new war-related circumstances. The law and judiciary are no exception. 
     This Inside Story aims to briefly shed light on Ukrainian recent landmark court practice in insolvency cases, which has pushed the envelope due to war circumstances and given a green light to consider the debtor’s claims on compensation of damages caused by Russia’s aggression against Ukraine at the location of and within the debtor’s pending insolvency case in Ukraine.
     Naturally, this case further provides food for thought as to the prospects of qualifying such a court decision as ‘an insolvency-related judgment’ for the purposes of future recognition and enforcement thereof abroad with the view to the UNCITRAL Model Law On Recognition and Enforcement of Insolvency-Related Judgments (‘MLIRJ’).
     Read the full story here by Dr Olha Stakheyeva-Bogovyk, Attorney-at-law, Ukraine; Associate, McDermott Will & Emery UK LLP
August 2023: The Directive Proposal and Creditor Representation in France: A New Opportunity for Creditors?
The proposal for a Directive of the European Parliament and of the Council harmonising certain aspects of insolvency law of 7th December 2022 (“Proposal”), which, at the urging of the financial markets, is intended to give greater respect to creditors’ rights, has not gone unnoticed in France. 
     In addition to the highly controversial simplified winding-up proceedings of insolvent micro-enterprises, the planned introduction of “pre-pack proceedings” à la française has been perceived with great scepticism in Germany, whereas in France the latter is noted with a certain satisfaction. Indeed, since their introduction in France in 2014, pre-pack proceedings are considered as one of the key restructuring tools for large companies. Nevertheless, in case of transposition into French law of the provisions as they stand now, French administrators may face the challenge of reconciling the principles of competitiveness and transparency required by the Directive for the sale process with the confidentiality that applies in France to the preparatory phase. 
     The limited comments and discussions in Germany on creditors’ committees (Title VII of the Proposal) can probably be explained by the fact that creditors’ committees have been anchored in the German system for many years. In France, it was mainly argued that the interests of creditors were already sufficiently represented by the mandataire judiciaire  and the contrôleurs,  so that the introduction of creditors’ committees will not be necessary. The Proposal now gives France the opportunity to balance its debtor-friendly insolvency law in favour of a more equitable framework that upholds the rights of creditors, without giving-up its primary goal of preserving employment.
     Read the full story here by Anja Droege Gagnier, and Amélie Dorst of BMH Avocats, Paris
June 2023 - UNCITRAL: The Creation and Development of Insolvency Norms
The UNCITRAL Model Law on Cross-Border Insolvency was approved by the General Assembly of the United Nations in a resolution on 15 December 1997. To date, the Model Law has been adopted by an ever-growing number of countries, counting some 58 state members representing 61 jurisdictions in total. In the context of the quest for international regulation, the adoption of the Model Law by UNCITRAL represents for many the most important step taken in the emergence of a truly international framework for co-operation in insolvencies. This is not to denigrate the many excellent initiatives at regional level that continue to flourish, such as the European Insolvency Regulation (Recast), early work on whose predecessors influenced the shape of the UNCITRAL text. Nonetheless, UNCITRAL’s reputation as a consensus builder and its work on many successful international texts has done much to ensure that this text genuinely represents the views and expectations of stakeholders. 
     Jenny Gant (Lecturer at University of Derby, UK and Secretary of the INSOL Europe Academic Forum) and Paul Omar (Technical Research Coordinator, INSOL Europe) provide background on Working Group V, where the work on insolvency is now situated, in this month's Inside Story.
April 2023 - Pre Packs, Employees and the Spirit of EU Law
The hot topic in European insolvency has migrated from the implementation of the Preventive Restructuring Directive to the Proposal for a Directive on the harmonisation of certain aspects of insolvency law. Among those provisions is the pre-pack. 
     You can read Jenny Gant’s article on ‘Pre-Packs and the Impact on Employees’ here, which focuses on the interaction of the proposal of harmonisation of pre-packs in the Member States and the Acquired Rights Directive in the light of the case law of the European Union Court of Justice.
     Jenny Gant is a Lecturer at University of Derby, UK and Secretary of the INSOL Europe Academic Forum.
March 2023 - The Swiss Blocking Statute: Criminal Proceedings as Interim Relief in Fraud-Related Insolvency CasesIn Switzerland, a strict blocking statute and the well-known banking secrecy make it difficult for the foreign insolvency office holder to seek information on the debtor’s assets from third parties (such as banks) prior to the recognition of the foreign insolvency decree. Criminal proceedings, however, offer a precious tool to obtain urgent freezing and disclosure orders at the earliest stage of fraud-related cases.
     What does this mean for foreign IPs? Embedded in Article 271, para. 1 of the Swiss Criminal Code, the Swiss Blocking Statute provides that a person shall be liable to a custodial sentence not exceeding three years or to a monetary penalty, or, in serious cases, to a custodial sentence of not less than one year, if they:
  • carry out activities on behalf of a foreign State on Swiss territory;
  • without lawful authority; and
  • such activities are normally the responsibility of a public authority or public official.
Foreign insolvency office holders qualify as persons who carry out activities on behalf of a foreign State, as they are appointed by a foreign Court in order to conduct a non-voluntary liquidation process pursuant to insolvency laws. Thus, they have to be vested with lawful authority by seeking the recognition of the foreign insolvency decree before the Swiss civil courts, pursuant to Articles 174ff. of the Swiss Private International Law Act. As Switzerland is not an EU country, the EU rules do not apply. However, since 2019, a new cross-border insolvency act applies in the country, which is deemed compatible with the UNCITRAL Model Law. In particular, the requirement of reciprocity has been abolished.
     Read the full story here by Antonia Mottironi, Partner, Ardenter Law, Geneva, Switzerland.
February 2023 - New Tools for Greater Efficiency in French Insolvency Proceedings: A Case Study
The current multiplication of crises is weakening the entire economic environment, regardless of the size or history of the company. With the end of the aid policies practised until now by many governments, the difficulties are becoming more acute. At the same time, legal tools are evolving to enable the consequences of these crises to be dealt with more effectively.
     In October 2021, the multi-professional firm O3 Partners accompanied one of the alternative players in the energy sector, which until then had been growing rapidly, in what will be the first application in France of the accelerated safeguard procedure with classes of affected parties. This procedure has been completely renewed by Ordinance No. 2021-1193 of 15 September 2021, which came into force on 1 October 2021 and which transposed the Directive on Restructuring and Insolvency.
     The context of unification of the different laws of the EU Member States gives the ordinance an innovative character, but has also added legal uncertainty to the economic insecurity. It creates a new field in which counsel and experts as well as the court must integrate and implement new concepts and reasoning stimulating imagination and creativity.
     Read how the case unfolded in this month's Inside Story by Isabelle Didier, Founder and President of GRIP 21; Lawyer and court-appointed Administrator (Paris).

January 2023 The Insolvency Directive Proposal: First General Impressions from the Polish Perspective
On 7 December 2022, the European Commission published a “Proposal for a Directive of the European Parliament and of the Council harmonising certain aspects of insolvency law (“Proposal”), which is currently available for comments from the public and interested entities. The Proposal regulates the following areas of substantive insolvency law: Avoidance actions; Asset tracing; Pre-packs; Duty of directors to submit a bankruptcy petition; Simplified winding-up for microenterprises; Creditors’ committees; and Drawing-up of key information factsheets by Member States on certain elements of their national law on insolvency proceedings.
     With the scope as largely outlined, the Proposal seems to harmonize quite a lot of important areas related to insolvency law. It is also another legal act at the European Union level covering insolvency and restructuring law, which subject matter seems to be more important from the economic and legal point of view, especially in the times of crisesRead the author's view of the new Proposal here by Mateusz Kaliński, Tatara and Partners, Poland. 
December 2022 - North Macedonia becomes the First EU Candidate Country to adopt the Directive on Restructuring and Insolvency
In February 2022, the Ministry of Economy of the Republic of North Macedonia prepared, in cooperation with International Financial Corporation (World Bank Group), a Draft Law on Insolvency and submitted it to the Parliament (Собрание).  The objective of this law is to provide protection of investors and their business, flexible and simplified proceedings for small enterprises and to clarify the conditions for participation of creditors in insolvency proceedings. One of the biggest novelties, not only in North Macedonia, but among all EU candidate countries in the West Balkans, is the introduction of preventive restructuring proceedings for debtors in difficulties. This instrument should allow the debtor to negotiate debt settlement options with its creditors and timely avoid insolvency. For an EU candidate country, it will also mean harmonization of the national legislation with the Directive on Restructuring and Insolvency. 
Read the full story here by Dr Djuro M. Djuric (Visiting Research Fellow, Martin Luther University, Halle-Wittemberg, Germany; Associate Professor, College of Applied Studies for Economics and Administration, Belgrade, Serbia).
November 2022 - Local Public Entities in Distress – An English Perspective
This is arguably one of the most difficult times in history for local authorities around the world. Authorities in developed countries like the UK are no exception. Councils in the UK face issues that are common to all types of local entities, such as inflationary costs for the provision of essential services (particularly social care) and reduced transfers and tax collection abilities due to the current global economic recession. In addition, they face unique challenges. These include increasing costs to service the commercial debt they had been encouraged to take in previous years, a dwindling and aging population, and increased demands of essential services from a more vulnerable population.
     The purpose of this short Inside Story is to uncover the causes of municipal failures, assess the remedies available under the law and discuss whether regulatory changes are needed to improve the status quo. Read the full story here by Dr Eugenio Vaccari, Royal Holloway, University of London (UK) and Prof Yseult Marique, University of Essex (UK), FöV Speyer (DE), UC Louvain (BE).
October 2022 - A Polish Perspective on the Pre-Pack in the context of the Heiploeg Case before the CJEU
In Poland, the pre-packaged sale, also called the pre-pack administration, has been possible since 2016, as a result of important amendments to Bankruptcy Law and Restructuring Law – introduced via the Act of 15 May 2015. The pre-pack has grown in popularity, though some pitfalls occurred when two important cases were brought to the Court of Justice of the European Union (CJEU), namely Smallsteps (also known as Estro) (C-126/16) and Plessers (C-509/17) cases.
     As a consequence of the first case especially, Estro or Smallsteps, the opinion of Polish government was that this required amendments to the Bankruptcy Law provisions regulating pre-packs. Within the legislative process, numerous experts contested this need and presented opinions proving that amendments are not required and they may make the Polish pre-pack less popular for the business. Indeed, after the amendments – introducing direct application of the Article 23[1] of the Polish Labour Code to a bankruptcy sale – the popularity of pre-packs went significantly down, with an estimated decrease of perhaps half of projects. Read the full story here by Mateusz Kaliński, Tatara and Partners, Poland.
September 2022 - Justified Implementation of the EIR and National Laws - Avoiding Unjust Forum Shopping from Estonia to Ireland!
The Estonian Chocolate brand “Kalev” is one of the most recognised trademarks in Estonia. Unfortunately, Oliver Kruuda, the person who was behind this trademark, is also well known, but not in such a good light. He was a very successful businessman till recently, when he tried to escape from obligations arising in Estonia by relocating himself to Dublin with the hope of having a fresh start within a year under Irish insolvency law. Luckily, the Estonian and Irish Courts implemented national laws and the European Insolvency Regulation (EIR) correctly, meaning this little trick by an Estonian businessman did not succeed. Overall, justice was delivered and the ancient Greek god Themis supervised the situation perfectly.
     The Creditor filed a petition against Mr Kruuda (“the Debtor”) with the Tartu County Court of Estonia on 14 May 2021, seeking a declaration of bankruptcy against the Debtor. The Tartu County Court appointed an interim trustee and restrained the Debtor’s rights to transfer assets and applied a general stay to enforcement proceedings on 7 June 2021. Without any knowledge of the Estonian courts, around the same time, the Debtor turned to an Irish Court, which declared the Debtor’s bankruptcy on 28 June 2021. Of course, the Debtor did not inform the Irish Court either about the bankruptcy proceeding in Estonia. Later, on the 1 July 2021, the Debtor informed the Tartu County Court about the declaration of bankruptcy in Ireland and petitioned for the termination of the Estonian bankruptcy proceeding. Nevertheless, the Tartu County Court declared the bankruptcy of the Debtor on 19 October 2021.
     Read the full story here by Anto Kasak, Partner, Kasak and Lepikson Law Firm; Lecturer, Tartu University, Estonia and Kedli Anvelt, TGS Baltic Law Firm, Estonia.
July 2022 - Harmonisation in the EU - The Portuguese Perspective
The 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 clausesRead the full article here.
June 2022 - UNCITRAL WG5 Session 60: Focusing on Asset Tracing and Applicable Law
Springtime in New York…although not many of the delegates and observers shared the joy of this trip to the Big Apple given the hybrid approach taken this year due to the continuing impact of COVID, many did attend in person to enjoy once again the camaraderie and fellowship with colleagues from all over the world, reports Jenny Gant (UK).
     During this session, the UNCITRAL Working Group V met to discuss firstly a few updates on the UNCITRAL Model Law on Cross-Border Insolvency: the Judicial Perspective. This document aims to acknowledge the international origin of the Model Law on Cross-Border Insolvency and to promote the uniformity in its application. The updates to the Judicial Perspective cover developments by other international bodies as well as interpretations of the MLCBI by judiciaries across the world. The Updates proposed were accepted with a few additions during the session.
     The second important topic on the agenda revolved around the introduction of some kind of harmonising instrument that deals with civil asset-tracing and recovery in insolvency proceedings. Finally, the Working Group considered the topic of applicable law in insolvency proceedingsRead the full article here by Jenny Gant.
May 2022 - A is for Adversity, W is for War - Corporate and Restructuring Novelties in Ukraine resulting from the Russo-Ukrainian WarFor the absolute majority of Ukrainians, their lives changed drastically on 24 February – with air defence alarms heard for the very first time since the end of WWII and the first Russian cruise rockets hitting Ukrainian infrastructure and housing. As the third month of the war is coming to an end, the Ukrainian Parliament (Verkhovna Rada) continues to introduce new legislation, not just aimed at tackling the consequences of the war, but also becoming a weapon itself against the aggressor.
     With the start of the war and introduction of the martial law no major changes in corporate legislation have taken place in Ukraine. However, some restrictions implemented due to martial law have changed the corporate landscape directly or indirectly. Most of these restrictions affect Russian-affiliated companiesRead the full article here by Alesya Pavlynska and Anton Molchanov from Kyiv, Ukraine.
April 2022 - Dull rerun or successful spin-off? Is the new ‘private’ version of the Dutch Scheme covered by the EU Judgments Regulation?
Prior to Brexit, much ink was spilled by English jurists debating whether the English scheme of arrangement was covered by the EU Insolvency Regulation, the EU Judgments Regulation, or neither regime. Whenever the issue was brought before the English courts, however, they would generally reach the conclusion that it actually did not matter that much: the court would apply domestic law regardless. And with that, the English courts never reached a solid landing on the issue of whether either EU regulation applied or not. Season one of the ‘EU regulations-show’ essentially ended with a nail-biting cliff-hanger in England, and as Brexit is unlikely to be reversed in the foreseeable future, there seems to be little hope for a sequel…
     Enter the Dutch! While Brexit has made the issue in England largely moot, the underlying discussion has recently got its own spin-off show in the Netherlands. On the 1 January 2021, the Dutch scheme – similar to the English scheme of arrangement and English restructuring plan – finally entered into force in the Netherlands (after having been in the works for close to eight years). Perhaps with the aim of avoiding the same discussions that preoccupied English jurists for many years, the Dutch legislator decided to forgo typical English politeness about the subject, choosing instead to be typically Dutch and blunt about it. Read the full article here by Géza Orbán, Associate, Allen & Overy, Amsterdam.
March 2022 - Evaluating the Evidence and the Scope of, and Limits to Common Law Recognition of a Foreign BankruptcyIn Kireeva & Anor v Bedzhamov [2021] EWHC 2281 (Ch), Snowden J, as he then was, dealt with two applications. The first was an application by Lyubov Andreevna Kireeva, the Russian trustee in bankruptcy (arbitrazh manager) of Georgy Bedzhamov, for recognition at common law of her appointment with a view to enabling her to take control of Mr Bedzhamov’s property and assets in the UK; the second was an application in existing proceedings between Vneshprombank LLC and Mr Bedzhamov, by which the trustee, a non-party, sought an order under Civil Procedure Rule (CPR) 40.9 setting aside part of an order made in March 2021 varying the terms of a worldwide freezing order originally made in 2019. The variation had the effect of permitting Mr Bedzhamov to sell a Belgrave Square property and use the proceeds of sale to pay accrued and anticipated living expenses, legal fees in connection with the defence of the UK proceedings due to come on for trial in January 2022 and other disbursements. Read the full article here by Frances Coulson, Robert Paterson and Stephen Baister of Wedlake Bell LLP, London, UK.
January 2022 - The Successful Restructuring of a FMCG Retailer in Poland: Mission (almost) Impossible
The successful restructuring of an insolvent FMCG retail chain in Poland is a rarity. For various reasons, brands such as Alma, Real, Billa, Hit, Géant, Leader Price, Bomi and MarcPol have not survived the competitive race and have ceased operations. Furthermore, after 25 years in Poland, Tesco sold its 300 stores in 2020 to Netto (Salling Group). The Polish retail market may be tempting (EUR 60 billion/2019, PMR), but it is also highly competitive with strong consolidation trends.
     The successful turnaround of the Piotr i Paweł retail chain has shown two things: it is extremely difficult to continue doing business bearing the “under restructuring” banner and that an FMCG operation in distress cannot be carried out without serious support from an external financing entity, preferably a strategic investor. What is also needed is a huge amount of luck! Read the full story here by Patryk Filipiak, Partner; Head of Restructuring and Bankruptcy, FilipiakBabicz, Poland.

December 2021 - Insolvency Proceedings in Hungary: the New “Reorganisation” Model
Since the COVID-19 pandemic, to mitigate its effect on the economy, the Hungarian Government has taken several measures, passed several pieces of emergency legislation and introduced new legal tools to help – among others –local businesses. As part of the emergency legislation, the Hungarian Government introduced a new type of insolvency procedure, designed to be the main alternative to the existing traditional bankruptcy procedure (in Hungarian: “csődeljárás”). This new procedure serves as a new potential tool for businesses to handle and survive an insolvency situation, to restore their solvency and to continue the business operations.
Read the full story here by Zoltan Fabok, Special Counsel, DLA Piper, Hungary and Mark Seres, Associate, DLA Piper, Hungary.
November 2021 - New laws on Digital Assets in Serbia
As from 21 June 2021, the first regulation on digital assets has entered into force in Serbia. In this way, Serbia became one of the fintech countries where a complete legal framework for digital assets is available. Moreover, it provides an attractive business environment and legal security for investors. The Law on Digital Assets (LDA) regulates the issuing of digital assets and secondary trading of digital assets in the Republic of Serbia. It also prescribes the provision of services related to digital assets, liens and fiduciary rights over digital assets, the competences of the Securities Commission and the National Bank of Serbia, as well as supervision of the implementation of the law.
Furthermore, this is the first regulation introducing the fiduciary as a security instrument in the Serbian legal system. As for insolvency law, the new regulation acknowledges digital assets as enforceable assets and status of both secured and pledge creditors. The notion of digital assets comprehends virtual assets and digital tokens. Finally, the new regulation regulates the status of the digital assets if a debtor enters insolvency proceedings.
Read the full story here by Djuro Djuric, PhD., Associate Professor, College of Economics and Administration, Belgrade, Serbia.
October 2021 - Turning back the Clock: Post-Brexit UK and Cyprus Cross-Border Recognition
The loss of the relatively streamlined and automatic recognition regimes which applied between the UK and EU member states by virtue of the EU Regulation on Insolvency Proceedings 2015 (848/2015) (EIR Recast), has been described as a “great tragedy”. What was a clear and smooth route to recognition between Member States, facilitating more efficient and swift cross border insolvency proceedings with obvious benefits to creditors and other stakeholders, no longer applies for UK office holders who will need to seek recognition in EU member states and vice versa, leaving office holders to navigate through a fragmented and less predictable landscape of common law, domestic legislation and international treaties to identify the most appropriate route.
For insolvency proceedings which commenced prior to 31 December 2020, the position was clarified by the Withdrawal Agreement (2019/C 384 I/01); the EIR Recast continues to apply to those cases. The pathway, however, to recognition for insolvency proceedings commenced post 31 December 2020 will undoubtedly be more complex and the increase of cross border structures involving Cyprus means it is necessary to identify the legislative framework which will be applicable for recognition to be achieved.
Read the full story here by Chris Iacovides, Director, CRI Group; Certified Public Accountant; Licensed Insolvency Practitioner, UK, Cyprus and Romania and Andri Antoniou, Director, CRI Group, Cyprus; Solicitor (non-practising), England and Wales; Licensed Insolvency Practitioner, Cyprus; Former Qualified Examiner, UK Insolvency Service.
August 2021 - The Challenges of Further Digitalisation in Estonian Insolvency Proceedings
Estonian digital governance has been among the best in the world with almost 99% of state services available online. However, one could argue that insolvency proceedings have not been smooth or digital enough so far. Several years of insolvency law revision in Estonia has finally reached its momentum and significant amendments were enacted as of 1 February 2021. The aim of these changes to the Bankruptcy Act is to make insolvency proceedings faster, more cost-efficient and transparent. This should also increase satisfaction of claims to creditors and decrease the number of asset-less insolvencies. This piece introduces a selection of the changes enacted in the Bankruptcy Act with the aim of making insolvency proceedings even more digital, smooth and user-friendly.
Read the full story here by Signe Viimsalu, Mag.Iur, PhD, MBA; Managing Partner, SiGN9, Estonia.

June 2021 - UNCITRAL Working Group V and a Simplified Insolvency Regime for MSEs
The last year has laid bare the weaknesses of many modern market economies to guard against the financial and social costs of a health crisis that has driven the global marketplace nearly to a standstill. Emergency measures covering everything from furlough schemes for workers unable to perform their job due to workplace closures to adjustments to some of the more draconian aspects of insolvency procedures, such as filing obligations, were introduced and have been steadily extended through the now extensive period of the pandemic.
Some of the hardest hit businesses have been those of small and micro sizes (MSEs). In addition, the many shared responses to the crisis such as the isolation of populations, travel bans, and limits placed on indoor and outdoor gatherings have potentially changed the perspective of individuals going forward. Who knows what long-term impact this crisis will have on the behaviours of consumers in particular within the global marketplace? Read the full article here by Dr Jennifer L. L. Gant (INSOL Europe Delegate to UNCITRAL WG-V).

May 2021 - For Great Ills, Great Remedies! The New Extraordinary Proceedings for the Economic Sustainability of Businesses in Portugal
Since the early days of the pandemic, the Portuguese legislator has taken several extraordinary measures to help businesses: the deferral of specific obligations, namely tax obligations and social security contributions, bank loans, performance in lease contracts; a furlough scheme for employees; the opening of lines of credit, just to name a few. As far as insolvency law is concerned, the only measure for a long time has been the suspension of the duty to file for insolvency. The usefulness of such a measure is, however, limited, given the fact that, to begin with, the creditors and the debtor itself retains the right to request the opening of the insolvency proceedings.
More recently, Law No. 75/2020 of 27 November 2020 introduced additional measures, from which stand out the new extraordinary proceedings designed to allow the swift restructuring of businesses affected by the COVID-19 crisis (Articles 6 to 15). The national legislator has put into practice the old saying “for great ills, great remedies” and created extraordinary proceedings for an extraordinary crisis. But are these proceedings the (most) appropriate tool to meet the actual needs of the businesses (companies and entrepreneurs)? 
Read the full article here by Catarina Serra (Justice of the Supreme Court, Professor, University of Minho (Braga), Portugal).
April 2021 Simplified Restructuring Proceedings in Poland: Risks for Creditors
As a result of the COVID-19 outbreak, a new type of restructuring procedure was introduced in Poland: the “simplified restructuring procedure” (SRP), which, in principle, corresponds to the “scheme of arrangement” known to English law. There are, however, material nuances of the new regulations, which may have a negative impact on the rights of the foreign creditors. In this article, authors Paweł Chmieliński (Advocate and Restructuring Advisor, KKLW Legal, Poland) and Przemysław Wierzbicki (Advocate and Restructuring Advisor; Managing Partner, KKLW Legal, Poland) provide the most important solutions which foreign creditors can use to defend their interests. A special feature of the new regulation is its temporary nature, which has been tied to the anticipated duration of the impact of the pandemic. As such, simplified restructuring procedures can be initiated as of 24 June 2020 (date of the entry of the new regulation into force) till 30 June 2021. Read the full story here.

March 2021 - The Implementation of the EU Preventive Restructuring Directive in Germany: A New Star in the Firmament
On 22 November 2016, the European Commission presented a proposal for a directive to transform the restructuring and reorganisation laws within the European Union, which was supposed to help finally deal with the consequences of the 2008/2009 financial crisis. After extensive discussion surrounding the topic, a compromise was reached between the Council, the Commission and the Parliament in December 2018, leading to Directive (EU) 2019/1023 or the “Directive on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132” (Preventive Restructuring Directive/PRD) entering into force in July 2019.
The implementation of the PRD has now been finalised in Germany with the adoption of the Stabilisation and Restructuring Framework for Enterprises Act (Unternehmensstabilisierungs- und restrukturierungsgesetz/StaRUG) in the Bundestag on 17 December 2020. The StaRUG is intended to create the basis for the enforcement and implementation of corporate restructurings against the resistance of creditor minorities while avoiding insolvency proceedings.
Olomon Ljumani (Associate, ATN-Rechtsanwälte, Wuppertal; Lecturer, University of Public Administration North Rhine-Westphalia, Germany) outlines the key points of the new legislation here.

February 2021 - Pre-packaged Administrations in the UK: Nothing new under the Sun!
The English corporate insolvency framework has gone through significant changes in recent times. Some of these changes have been introduced as soon as the effects of the COVID-19 pandemic on the UK economy became apparent. Nevertheless, last summer the Corporate Insolvency and Governance Act 2020 (the Act), which completed its progress in the Parliament and received Royal Assent on 25 June 2020, coupled these temporary measures with long-term reforms and regulatory powers to significantly amend the UK corporate insolvency framework.
Similar to other countries, the UK introduced some emergency legislation aimed at suspending statutory demands and restricting winging-up petitions, as well as the liability for wrongful trading. At the same time, with the Act, Parliament took the opportunity to introduce some long-discussed and more permanent changes to the corporate insolvency framework. These include the introduction of a short free-standing company moratorium, a new restructuring plan procedure (known as “part 26A restructuring plan”) modelled after the successful schemes of arrangement (but with a cross-class cram-down!), and a general ban on the enforceability of ipso facto clauses. Read the article here by Eugenio Vaccari (Lecturer, Department of Law and Criminology, Royal Holloway and Bedford Colleges, University of London, UK).

January 2021 - The Dutch Scheme is in Force: European Restructuring Practice on the Move!
On 1 January 2021, the Dutch interpretation of the “debtor-in-possession proceedings”: The Wet Homologatie Onderhands Akkoord (WHOA), came into force. The WHOA provides for a brand-new restructuring tool, which, in our view, is a very welcome addition to the Dutch Bankruptcy Code, which dates back to 1896 and basically consists of only two types of formal insolvency proceedings for enterprises: suspension of payments and bankruptcy. The WHOA, also referred to in some circles as the “Dutch Scheme”, enables viable enterprises in financial distress to restructure their liabilities on a going concern basis via a restructuring plan. 
This Inside Story by Jasper Berkenbosch (Partner, Business Restructuring and Reorganization Practice, Jones Day, Amsterdam, The Netherlands) and Sid Pepels (Associate, Business Restructuring and Reorganization Practice, Jones Day, Amsterdam, The Netherlands; Doctoral Researcher, Radboud University Nijmegen, The Netherlands) briefly touches upon several of the Dutch Scheme’s key features, and contemplates on the role that this new Dutch proceeding may play in the European restructuring practice. Will it turn the Netherlands into the new restructuring hub? Download the full story here.

December 2020 - Second Wave of Changes to Czech Insolvency Law - Covid Act II
With the numbers of active cases of coronavirus SARS CoV-2 rising in the Czech Republic, a new law aiming once again to further mitigate the impact of the measures in combating the coronavirus SARS CoV-2 epidemic has been recently adopted (the Covid Act II). The Covid Act II concerns three main areas: (a) extending the time of the suspension of the debtor’s duty to file for insolvency; (b) renewing the time period for debtors to apply for an extraordinary moratorium protecting them from certain creditor actions; and (c) removing the condition to obtain creditors’ approval of an extension of an already declared extraordinary moratorium. This article by Petr Sprinz (of Counsel, Allen and Overy, Czech Republic) and Jiří Rahm (Associate, Allen and Overy, Czech Republic) will address the topics below from the perspective of questions frequently asked by clientsDownload the full story here.
November 2020 - Extrajudicial Personal Bankruptcy in Russia
In Russia, Federal Law No. 289-FZ dated 31 July 2020 has introduced a procedure for the extrajudicial bankruptcy of natural persons. Pursuant to this law, as from 1 September 2020, individuals can enter a bankruptcy process and can obtain a bankruptcy discharge without paying any fees, outside of court proceedings and without the appointment of an insolvency practitioner being necessary. Personal or consumer bankruptcy is a relatively new phenomenon in Russian bankruptcy law. Unlike companies, prior to 1 October 2015, individuals who were not entrepreneurs could not file for bankruptcy in Russia. Occasionally, they even resorted to a “bankruptcy tourism” to benefit from a discharge granted in a foreign jurisdiction. This changed in 2015 with the addition of Chapter X (Personal Bankruptcy) to the Russian Bankruptcy Act. Since then, the number of personal bankruptcy cases has been steadily on the rise. Ilya Kokorin, of Counsel, Buzko Legal, Russia; Doctoral Researcher, Leiden University looks into the new lawDownload the full story here.
October 2020 - Making Sense of the COMI Definition in Italy
It is well-known that the centre of main interests (“COMI”) is defined by Regulation (EU) 2015/848 (“EIR”) as “the place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties” (Article 3 (1)). It mainly works both as a ground of jurisdiction (to open the main proceedings) and as a ground for the Regulation to be applied. The Italian Business Crisis and Insolvency Code, which was promulgated by legislative decree 12 January 2019 no. 14, revises the Italian insolvency law. One novelty is to have replaced the debtor’s “principal seat” with the COMI as a ground of jurisdiction (see Article 11), both to open Italian insolvency proceedings and to rule on the so-called “ancillary actions”. Besides, the Code embeds the same definition of the COMI as the EIR (see Article 2 (m)). Antonio Leandro, Professor, Department of Economics, Management and Business Law, University of Bari, Italy, explains the changes. Download the full story here.
September 2020 - Transposing the Preventive Restructuring Directive: Expert Views from Estonia
The Estonian Ministry of Justice commissioned a group of insolvency experts to provide an expert opinion about the implementation of Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019. The expert group consisted of insolvency specialists from different occupations: attorneys-at-law, insolvency trustees, judges, academics and representatives of banking. This article summarises the aspects of the study, which might be interesting for other European countries facing similar issues in the transposition process. Anto Kasak (Partner, Kasak and Lepikson Law Firm; Lecturer, Tartu University, Estonia) and his team report for INSOL Europe. Download the full story here.
July 2020 - The Rise of a New Phoenix: The English Light-Touch Administration
The economic impact of Covid-19 outbreak has triggered calls for emergency fiscal and legislative measures to address liquidity and legal problems. Some of the measures directly aimed to companies in distress make it harder for creditors to wind-up companies. However, in the wake of governmental intervention, the industry came up with ingenuous solutions to avoid the demise of distressed yet viable businesses. One of these solutions is restructuring or “light touch” administration (‘LTA’). Eugenio Vaccari, Lecturer, University of Essex, UK, investigates if the rise of LTAs is a welcome addition to the rescue toolkit of English practitioners or a mischievous phoenix for the English insolvency framework, and speculate on the impact of the announced regulatory reforms for the future of LTAs. Download the full story here.
June 2020 - The State of Alert and Insolvency Procedures in Romania
Due to the global Covid-19 pandemic, Romania declared a state of emergency, as of 16 March 2020, by Presidential Decree No. 195/2020 (Decree) for 30 days, which, on 15 April 2020 was extended by another 30 days. At the same time as the Decree was enacted, the emergency authorities imposed “lockdowns”, including measures like closing non-essential businesses, limiting public gatherings and limiting people’s movements as well as monitoring the streets to ensure people remain inside. These measures have serious implications for the right to liberty, freedom of association and freedom of movement. In addition, many employees lost their jobs or their individual labour agreements were suspended due to technical unemployment; hotels are empty, flights are grounded, restaurants and other small businesses are closing.
Alina Valeanu and Andrei Zamfirescu, Senior Associates at bnt attorneys in CEE, Romania report on how insolvency procedures are affected due to the ongoing crisisDownload the full story here.
May 2020 - Covid-19 and Insolvency Developments in Italy
Italy’s national lockdown in response to the Covid-19 health emergency has been in place since 9 March 2020. Several contingency rules aimed at containing the economic and financial impact of the related lockdown were quickly adopted, affecting various area of law related to business activity, as company and insolvency law. This Inside Story means to point out the most relevant changes involving insolvency law, on the premise that these provisions could be further modified or integrated due to the general uncertainty of the length (and after effects) of the emergency situation.
Domenico Benincasa, Partner, Studio Legale Benincasa Nervi e Pelligrini, Rome; Francesca Burigo, Professor, Faculty of Law, Università Ca’ Foscari, Venice and Carlo Ghia, Partner, Studio Legale Ghia, Rome report for INSOL Europe. Download the full story here.
April 2020 - Relief for Directors in the Coronavirus Crisis: UK Developments and Lessons for Cyprus
Whilst the UK is taking proactive measures to aid ailing companies and businesses from the aftermath of the coronavirus outbreak, one cannot help but wonder what the Cyprus government will do since the Examinership regime introduced as part of the rescue culture in 2015, has failed miserably. The UK may have been slower off the mark than many other countries in their fight against coronavirus, nevertheless, the authorities have now ramped up the speed and scale of the measures being implemented to protect their national health system and the economy.
Chris Iacovides, Director, CRI Group; Certified Public Accountant; Licensed Insolvency Practitioner, UK, Cyprus and Romania and Andri Antoniou, Director, CRI Group, Cyprus; Solicitor (non-practising), England and Wales; Licensed Insolvency Practitioner, Cyprus; Former Qualified Examiner, UK Insolvency Service report for INSOL EuropeDownload the full story here.
March 2020 - Light at the end of the Debt Tunnel in Finland
No claim stands forever automatically, and debtors are protected by a kind of prescription (limitation) period set by legislation. Through the passage of time, by prescription, creditors lose their right to collect the receivables owed to them. The prescription period may refer to the time limit in which the material receivable expires or to a procedural time limit within which the creditor must file a claim in court. Usually, the material time limit can be interrupted by instituting formal or informal proceedings or notifications against the debtor before the prescription time lapses. The effect of an interruption is a new or an extended prescription period. The creditor’s right to unlimited interruptions means a lifelong debt burden for a debtor.
To cure this distress, many countries in the European Union and elsewhere have adopted different kinds of debt adjustment procedures for private persons. However, these proceedings may be time consuming and they are not suitable for all, including debtors with irregular incomes or entrepreneurs who may have difficulties in implementing the repayment plan, writes Tuula Linna, Professor, Faculty of Law, University of Helsinki, Finland. Download the full story here.
February 2020 - Examinership: The Irish Rescue Process 30 Years Later
In 1990, Ireland introduced a rescue process which reflects all of the main components of the Preventive Restructuring Directive (1023/2019). This procedure was originally contained in a larger scheme of corporate law reform and consolidation designed in the late 1980s, but the rescue process was extracted and passed hurriedly in September 1990 to respond to a crisis in the Irish beef industry. This first outing of what was called the Examinership process was a spectacular success leading to the rescue of the Goodman Group. The remainder of the original legislation was passed later in 1990. The Examinership process contains all of the key features in the Directive as explained by Irene Lynch Fannon, Professor of Law, University College Cork, IrelandDownload the full story here.
January 2020 - Georgian Insolvency Law is on the Move
Georgia’s insolvency system is facing significant changes today. The new draft law is ready to be enforced and will completely change the system. The current Insolvency Law 2007 is appreciated as primarily oriented towards a rapid liquidation of insolvent corporate entities and private entrepreneurs’ businesses with the subsequent distribution of remaining assets amongst the creditors. The number of insolvency cases dealt with by the local courts is fairly limited, most probably due to insufficient assets in the insolvent entities to cover the costs of the insolvency procedure. The law leaves many aspects of insolvency procedures either unclear or unregulated. Nana Amisulashvili, Chair, BRIPA (Business Rehabilitation and Insolvency Practitioners Association), Georgia, reports on the need for reform and the bold approaches of the new law. Download the full story here.

December 2019 - Recent Reforms to Insolvency Law in Serbia
In December 2017, and in June and December 2018, the Serbian legislator adopted the amendments to the Law on Insolvency. These were the fifth amendments to this Law since its entry into force in early 2010, but the third to this Law made since 2017. The purpose of the amendments presented by the legislator was to improve the provisions of the Law on Insolvency already in force, but also to introduce some new processes and to implement the provisions providing conditions for more adequate and better implementation of the existing legal processes, so as to more effectively carry out the insolvency procedure and improve creditor settlement. The most recent Amendments came into force on 9 December 2018 and the Amendments adopted in June 2018 on 1 January 2019. Djuro Djuric, PhD., Professor, College of Economics and Administration, Belgrade, Serbia brings us the novelties of the new law. Download the full story here.
November 2019 - Consumer Insolvencies in Poland AD 2020
The bankruptcy of natural persons not conducting economic activity has been in use in Poland since 2009. Initially, the legislation on so-called consumer bankruptcy did not fulfil its purpose. It was mainly because a consumer filing a petition for bankruptcy was obliged to prove that his or her assets were sufficient to cover the costs of proceedings. Also, the so-called “morality threshold” was set too high: the debtor had to prove that he or she had become insolvent by not acting recklessly and negligently (for reasons not attributable to him/her). In the period from the entry into force of the regulations to their amendment, only about 60 bankruptcy proceedings were conducted against persons not conducting business activity, compared to the overall population of 38 million people in Poland. The situation improved as a result of changes in the bankruptcy law passed in 2014. The new regulations in Poland are outlined by Marta Romańska, Attorney-at-Law, Filipiak Babicz and Patryk Filipiak, Attorney-at-Law, Restructuring Advisor, Filipiak Babicz. Download the full story here.
October 2019 - The Prevailing Interests of the Majority Creditor: Russia’s Insolvency Eco-System’s Response 
The realities of modern Russian bankruptcy boil down to the fact that the majority creditor in the bankruptcy case has unlimited possibilities with respect to the debtor. Moreover, the existing legal tools do not allow minority creditors to influence the bankruptcy procedure of a debtor. The problem of the predominance of the interests of majority creditors in bankruptcy is largely due to the passive role of the arbitration manager (i.e. the bankruptcy trustee). Instead of acting as an independent third party in a bankruptcy case and serving the interests of the bankruptcy estate, in the Russian reality the arbitration manager is a mere tool, acting as a de facto representative of the interests of the majority creditor. Thus, the “ecosystem” in Russian bankruptcy is built around a majority creditor or affiliated group, who uses the legal tools to serve their own property interests. Olga Savina, Partner and Julia Shilova, Advocate, Restructuring and Insolvency Practice, ART DE LEX, Russia look at the determining factors in the “management” of the current bankruptcy casesDownload the full story here.
September 2019 - The Riddle of Recognition: Russia’s Enigmatic Approach to Territoriality
In a series of recent judgments, Russian courts have confirmed their territorial approach to international insolvencies. These cases concerned recognition of foreign insolvency proceedings (foreign insolvency judgments), originating from the Czech Republic. In one of these, the court in Moscow refused to recognize and enforce the judgment of the Regional Court of Brno, which held the Czech company, PSJ a.s., to be insolvent.  The second case related to the personal bankruptcy of a Russian citizen, Ms. Terekhova. The Russian court refused to recognize the judgment of the City Court of Prague, which had established the bankruptcy of Ms. Terekhova.  
This Inside Story by Ilya Kokorin (of Counsel, Buzko and Partners, Russia; Lecturer, Leiden University) will describe the reasoning of Russian courts in both cases and explain how they fit (or, rather, do not fit) within the current international framework for recognition of cross-border insolvencies, as represented by the UNCITRAL Model Law on Cross-Border Insolvency (1997) (Model Law). Download the full story here.
July 2019 - Coordinating the Preventive Restructuring Directive and the Recast European Insolvency Regulation: Potential Issues
Issues arising from coordination among possible cross-border procedures seem underestimated in the Preventive Restructuring Directive (“PRD”). The PRD purports to be almost indifferent with respect to the Recast European Insolvency Regulation (“Recast EIR”). It cites the Recast EIR in various recitals and articles, but expressly takes into account the possibility that the restructuring framework which a Member State designs or chooses to implement the PRD will not be a procedure listed in Annex A of the Recast EIR, thereby leaving the Member States a freedom that, if fully used, may raise thorny issues. Leaving aside the issue of debtor discharge, with reference to restructuring frameworks, Recital 12 refers to the PRD as a step towards the establishment of “substantive minimum standards for preventive restructuring procedures”, vis-à-vis the procedural coordination sought by the Recast EIR. Lorenzo Stanghellini, Professor, University of Florence and Andrea Zorzi, Researcher, University of Florence dig into the issues of the problematic freedom for Member States. Download the full story here.
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.

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.

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.

December 2016 - The insolvency of Dutch retail chain Etam Groep and the position of suppliers
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November 2016 - The Curious Case of Vladimir Kekhman, and Treatment of Foreign Insolvencies in Russia
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October 2016 - Snooze and you lose in Slovakia
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September 2016 - Abengoa insolvency proceeding, Spain
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August 2016 - Schoeller Electronics GmbH, Germany
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June 2016 - A story of troubled retailers in Russia
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May 2016 - Czech Republic: Frivolous insolvency motions
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April 2016 - The Netherlands: Modulus Group
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March 2016 - The Principle of Confidentiality
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February 2016 - Orders for sale of properties in Europe: a helpful reminder
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January 2016 - UK: Insolvency Practitioners’ fees in England and Wales​
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December 2015 - Germany
Carlsson, an international luxury brand and the challenge of insolvency

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

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October 2015 - Germany
DAF Deutsches Anleger Fernsehen AG

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September 2015 - Spain
La Seda de Barcelona

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August 2015 - Ireland
Irish Supreme Court Strengthens Lenders’ Security
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July 2015 - Greece
Do we need to fear a Grexit?

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

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April 2015 – France
Re-energising the French Economy: Mission Impossible?
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March 2015 – Spain
Merry-Go-Round of Amendments to the Spanish Insolvency Law: Setback to sale of productive units

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

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