Creditors in insolvency proceedings

Existence of local insolvency proceedings

CHAPTER III. RECOGNITION OF FOREIGN INSOLVENCY PROCEEDINGS

(49) The insolvency law should specify that the measures applicable on commencement of insolvency proceedings remain effective throughout those proceedings until

Effect of a subordination agreement in insolvency proceedings

Article 11 6 . Recognition of foreign insolvency proceedings

(c) Request any relief available to it in insolvency proceedings.

Article 9 16 . Commencement of insolvency proceedings by foreign representative

(mm) Insolvency proceedings means collective judicial or administrative proceedings for the purposes of either reorganization or liquidation of the debtor's business conducted according to the insolvency law.

(46) The insolvency law should specify that, on commencement of insolvency proceedings add a, b, c, d, e

(ll) Insolvency estate means assets and rights of the debtor that are controlled or supervised by the insolvency representative and subject to the insolvency proceedings.

Access of foreign creditors to insolvency proceedings in the enacting State

(31) The insolvency law of the State in which insolvency proceedings are commenced (lex fori concursus) should apply to all aspects of the commencement, conduct, administration and conclusion of those insolvency proceedings and their effects. These may include, for example

The phrase quot to commence ... insolvency proceedings in the enacting State quot was found to be inadequate, as in many legal systems the insolvency proceedings were only commenced by judicial decision.

recognition of foreign proceedings does not prevent local creditors from initiating collective insolvency proceedings in the enacting State (art. 22)

Under some insolvency laws, intra group transactions may be subject to avoidance proceedings.

Article 9 16 . Commencement of insolvency proceedings by foreign representatives 71 75 17

D. Foreign assistance for insolvency proceedings taking place in the enacting State 6

providing for court jurisdiction and facilitating coordination in cases of concurrent insolvency proceedings.

Therefore, it was argued, quot interim proceedings quot should not be distinguished from other insolvency proceedings for the purposes of recognition.

(c) Commencement of insolvency proceedings by a group company against a related group company.

However, criminal proceedings associated with punishment of fraudulent activities often significantly impact the insolvency process.

For example, neither the European Council Regulation No. 1346 2000 on Insolvency Proceedings nor the UNCITRAL Model Law on Cross Border Insolvency addresses the issue.

46. His delegation supported the underlying principles of the Model Law judicial cooperation court access for foreign insolvency administrators and recognition of foreign insolvency proceedings.

(4) The insolvency law should specify that where a security interest is effective and enforceable under law other than the insolvency law, it will be recognized in insolvency proceedings as effective and enforceable.

The insolvency law should specify that, if a security right is entitled to priority under law other than the insolvency law, that priority continues unimpaired in insolvency proceedings except if, pursuant to the insolvency law, another claim is given priority.

That solution was defended on the ground that admitting recognition of non main proceedings would make it difficult to coordinate among several insolvency proceedings.

The Hague Conference collaborated closely with UNCITRAL in developing the chapter of the UNCITRAL Legislative Guide on Insolvency Law dealing with law applicable in insolvency proceedings.

It was observed that paragraph (7) used language consistent with the UNCITRAL Model Law on Cross border Insolvency and the European Union Convention on Insolvency Proceedings.

The question was raised as to whether it would be advisable, in case of non main proceedings, to limit the right to request the opening of insolvency proceedings to the local creditors, similarly to the provisions contained in article 3(4) of the European Union Convention on Insolvency Proceedings.

On 31 May 2002, EU Regulation 1346 2000 on cross border insolvency proceedings came into force.

Three issues of specific concern in insolvency proceedings involving one of a group of companies are

The unavailability of provisional measures in such circumstances could frustrate the objectives of the insolvency proceedings.

Besides, while liquidation of the business was often the inevitable outcome of insolvency proceedings, many proceedings were concluded with a successful reorganization of the business.

So, for example, the definition of assets of the debtor is included to explain the scope of the insolvency estate formed on commencement of the insolvency proceedings and thus the assets that will be affected by the commencement of those proceedings.

(30) The law applicable to the validity and effectiveness of rights and claims existing at the time of the commencement of insolvency proceedings should be determined by the private international law rules of the State in which insolvency proceedings are commenced.

There is, thus, at both a domestic and international level, a comparative absence of any guidelines as to the circumstances under which consolidated insolvency proceedings of companies belonging to a group should be considered in insolvency proceedings and how issues such as jurisdiction, filing, secondary proceedings and distribution should be addressed.

Article 10 17 . Access of foreign creditors to insolvency proceedings in the enacting State 76 98 18

Furthermore, recognition of foreign insolvency proceedings might not be considered as a matter of recognizing a judgment .

For example, it is not uncommon for insolvency proceedings to be partially or completely suspended pending criminal investigations.

It would provide for court access for foreign insolvency administrators, the recognition of foreign insolvency proceedings, the right to commence or participate in an insolvency proceeding in the enacting State and judicial cooperation and assistance in cross border insolvencies.

(138) The insolvency law should specify that a party in interest may appeal from any order of the court in the insolvency proceedings that affects its rights, obligations or interests.

The view was expressed that, while paragraph (1) was useful in fostering coordination among, and reduction of, multiple proceedings, the Model Provisions should go further and contain also a general rule on international jurisdiction for the opening of insolvency proceedings along the lines of article 3 of the European Union Convention on Insolvency Proceedings.

The stay does not apply to commencement of full insolvency proceedings in the United States, although those proceedings would be subject to the provisions on coordination and cooperation.

Note to the Working Group See recommendation I in the recommendations of this Guide on Insolvency The insolvency law should specify that, if a security right is entitled to priority under law other than the insolvency law, that priority continues unimpaired in insolvency proceedings except if, pursuant to the insolvency law, another claim is given priority.