Insolvency Regulation Recast (2015/848)
The Insolvency Regulation recast (Regulation (EU) 2015/848) is the principal instrument governing cross-border insolvency proceedings within the European Union. It recast and replaced the original Insolvency Regulation (1346/2000), addressing its shortcomings through expanded scope, enhanced coordination mechanisms for group insolvencies, improved access to information through public registers, and refined jurisdictional rules. The Regulation applies in all Member States except Denmark, with effect from 26 June 2017.
Scope and Material Application
The Regulation applies to collective proceedings premised on the debtor’s insolvency, where the debtor is partially or totally divested of assets and a liquidator or insolvency practitioner is appointed. Annexes A and B list the proceedings covered, which include not only liquidation but also preventive restructuring proceedings, debt discharge, and other hybrid processes. The Regulation excludes insurance undertakings, credit institutions, investment firms, and collective investment undertakings, which are subject to sector-specific regimes.
A significant innovation in the recast is the inclusion of proceedings that do not require the debtor to be insolvent but involve a substantial likelihood of insolvency (Article 1(1)). This brings pre-insolvency restructuring proceedings within the regulatory framework, aligning with the preventive restructuring Directive (2019/1023).
Centre of Main Interests (COMI)
The concept of the debtor’s centre of main interests is central to the jurisdictional framework. Article 3(1) vests jurisdiction in the courts of the Member State where the debtor’s COMI is situated. The Regulation presumes that the COMI of a company is its registered office (Article 3(1)), and for an individual, the place of habitual residence. The presumption is rebuttable: courts may open main proceedings in a different Member State if objective and verifiable factors establish that the actual COMI is elsewhere.
The Court of Justice has provided substantial guidance on COMI determination. In Interedil (Case C-396/09), the Court held that the registered office presumption can be rebutted only where the debtor’s central administration is located in a different Member State and where a comprehensive assessment of all relevant factors places the centre of management and supervision elsewhere. Eurofood IFSC (Case C-341/04) established that COMI must be determined at the time of the application to open insolvency proceedings.
Jurisdiction and Applicable Law
Main proceedings are opened in the COMI Member State and have universal scope, covering all assets of the debtor throughout the EU. Territorial (secondary) proceedings under Article 3(2) may be opened in a Member State where the debtor has an establishment — defined as any place of operations where the debtor carries out non-transitory economic activity with human means and assets.
The lex concursus (law of the opening State) governs the proceedings, covering conditions for opening, conduct, and closure, under Article 7. Exceptions include rights in rem (Article 8), set-off (Article 9), retention of title (Article 10), and contracts relating to immovable property (Article 11).
Secondary Proceedings and Coordination
The recast Regulation strengthens coordination between main and secondary proceedings through enhanced cooperation obligations on insolvency practitioners. Article 36 allows the insolvency practitioner in main proceedings to give an undertaking that creditors in the secondary proceedings will be treated as if secondary proceedings had been opened, potentially avoiding the cost and complexity of multiple proceedings.
Courts must cooperate under Article 42, and insolvency practitioners must communicate information and coordinate administration under Articles 41 and 43. The Regulation encourages the use of protocols and cross-border insolvency agreements.
Group Insolvency
The recast introduced a dedicated framework for group insolvency under Articles 56 through 77. This was a major innovation, recognising that modern corporate groups operate across borders and require coordinated treatment. The group framework does not create consolidated proceedings; instead, it mandates cooperation between insolvency practitioners appointed for different group members and provides for coordination proceedings.
Article 61 allows a request for group coordination proceedings to be submitted to any court having jurisdiction over a group member. A group coordinator is appointed to facilitate coordination, propose a group coordination plan, and mediate disputes. The coordination plan may recommend measures to resolve insolvencies of group members consistently.
Article 72 allows insolvency practitioners and courts to enter into protocols and agreements to coordinate the administration of group members’ estates.
Public Registers and Interconnection
The recast established the European e-Justice portal as a central access point for insolvency registers. Article 24 requires Member States to maintain publicly accessible insolvency registers and interconnect them via a decentralised system. The registers contain basic information including the debtor’s name, registration number, address, COMI, and the insolvency practitioner’s contact details.
The interconnection facilitates creditors’ ability to lodge claims in cross-border cases, particularly important given the time limits imposed by Article 55 for lodging claims.
Recognition and Enforcement
Article 19 provides for automatic recognition of judgments opening insolvency proceedings in all Member States. No formalities are required, though insolvency practitioners must provide evidence of their appointment. Grounds for refusal of recognition are limited to manifest public policy (Article 33) and irreconcilable earlier judgments.
Enforcement of judgments related to insolvency proceedings follows the Brussels Ia Regulation (1215/2012), with the exception that Article 32 of the Insolvency Regulation carves out such matters from the scope of Brussels Ia.