NEWSLETTER 13/2009

Commentary

PROTECTING THE COLLECTIVE INTERESTS OF CREDITORS IN INTERNATIONAL INSOLVENCY PROCEEDINGS

As companies extend thier operations across national borders, some flourish but some go bust. Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings coordinates actions against a debtor's assets and introduces uniform choice-of-law rules in cross-border insolvencies throughtout the EU, equalizing treatment of creditors and preventing forumshopping by debtors.

The regulation requires the main insolvency proceeding to be commenced in the EU member state where the debtor has the centre of its main interests. Secondary proceedings may be brought in another member state if necessary to wind up an establishment of the debtor's located there.

Any creditor located in a member state other than the one where a proceeding is commenced - including national tax and social security authorities - may file a proof of claim in the insolvency proceeding, following simple procedures set forth in the regulation.

The procedure and effects of an insolvency proceeding are determined in accordance with the law of the member state where the proceeding is commenced. The regulation provides for direct recognition in all other member states of judgements concerning commencement, conduct and closure of insolvency proceedings.

Regulation 1346/2000 implements the principle of protection of the interests of creditors and equal treatment of creditors. In facilitates joint enforcement of claims by creditors against a debtor whose assets are located in diffrent member states.

Anna Zabielska

attorney-at-law

The text of the above article has been published in the December issue of the Bulletin of the Netherlands-Polish Chamber of Commerce.

The Newsletter is published free-of-charge and is designed chiefly for clients of the law firm Mikulski & Partners. The articles are written by lawyers at the firm, but do not constitute legal advice.