Creditors in insolvency proceedings

(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.

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

C. Except as provided in D , the insolvency law should provide that an asset of the estate acquired after the commencement of an insolvency proceeding is not subject to a security right created by the grantor before the commencement of the insolvency proceeding.

Effect of a subordination agreement in insolvency proceedings

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

CHAPTER III. RECOGNITION OF FOREIGN INSOLVENCY

CHAPTER III. RECOGNITION OF FOREIGN INSOLVENCY PROCEEDINGS

(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

(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.

The insolvency law should provide that an asset of the estate acquired after the commencement of an insolvency proceeding with respect to the grantor is subject to a security right created by the grantor before the commencement of the insolvency proceeding to the extent the asset is proceeds (whether cash or non cash) of an encumbered asset which was an asset of the grantor before the commencement of the proceeding.

It was noted that national laws, in enumerating persons who may apply to commence an insolvency proceeding, often did not mention a representative of a foreign insolvency proceeding.

Article 11 6 . Recognition of foreign insolvency

laws of the enacting State relating to insolvency

relating to insolvency 147 150 30

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.

The modalities could draw on the principles laid out in national bankruptcy procedures.

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

Article 9 16 . Commencement of insolvency proceedings by foreign representative

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.

quot (d) creditors or other interested parties in a foreign State have an interest in requesting the opening of or participating in a proceeding in this State under insert names of laws of the enacting State relating to insolvency . quot

(d) creditors or other interested parties in a foreign State have an interest in requesting the commencement of or participating in a proceeding in this State under identify laws of the enacting State relating to insolvency .

(d) creditors or other interested parties in a foreign State have an interest in requesting the commencement of or participating in a proceeding in this State under identify laws of the enacting State relating to insolvency .

(kk) Insolvency court means a judicial or other authority competent to control or supervise an insolvency proceeding.

(2) Recognition of a foreign insolvency proceeding is, for the purposes of initiating proceedings in the enacting State referred to in paragraph (1) and in the absence of evidence to the contrary, proof that the debtor is insolvent.

The prevailing view was that it would be preferable to restrict the commencement of insolvency proceedings in the enacting State to those cases in which the debtor had an establishment in the enacting State.

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

relating to insolvency after recognition of a foreign main proceeding

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

(2) As soon as insolvency proceedings are opened in the enacting State, and to the extent that notification of commencement of insolvency proceedings is required for creditors in the enacting State, the court administrator shall cause notification of the opening of the proceedings to be made also to creditors not resident, domiciled or with a registered office in the enacting State.

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.

quot (c) in case the assigned receivables constitute security for indebtedness or other obligations, any insolvency rules or procedures generally governing the insolvency of the assignor

Interventions were made to suggest that the right to request the opening of insolvency proceedings should not be extended to a representative in a foreign non main proceeding.

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

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

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

It was pointed out that, in practice, a request for the opening of a local insolvency proceeding might typically come into consideration at the initial stages of the foreign insolvency proceeding, often to secure control over the assets of the debtor.

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

For that reason, once the Commission had completed its work on the draft Model Legislative Provisions, it should give serious consideration to drafting a model treaty and to work on cross border insolvency in the banking sector, the reorganization of insolvent enterprises, conflict of laws solutions in cross border insolvency cases and the effects of insolvency proceedings on arbitration agreements and arbitral proceedings.

The law should provide that, notwithstanding the commencement of an insolvency proceeding, the creation, effectiveness against third parties, priority and enforcement of a security right are governed by the law that would be applicable in the absence of the insolvency proceeding.

quot (2) Recognition of a foreign insolvency proceeding is, for the purposes of opening proceedings in this State referred to in paragraph (1) and in the absence of evidence to the contrary, proof that the debtor is insolvent. quot

(2) Recognition of a foreign insolvency proceeding is, for the purposes of commencing a proceeding in this State referred to in paragraph (1) of this article and in the absence of evidence to the contrary, proof that the debtor is insolvent.

provide that the foreign representative is entitled to commence an insolvency proceeding in the enacting State (if the conditions therefor are otherwise met) and that the foreign representative may participate in an insolvency proceeding in the enacting State (arts. 9 and 10)

(2) Recognition of a foreign insolvency proceeding is, for the purposes of commencing a proceeding in this State referred to in paragraph (1) of this article and in the absence of evidence to the contrary, proof that the debtor is insolvent.

The Model Provisions provide an opportunity for the enacting State to include in its insolvency law a clear statement of the effect that recognition of a foreign proceeding would have on the jurisdiction of the courts in the enacting State to commence or continue insolvency proceedings.