EU Seeks Harmony
Among Its Members for
Cross Border Insolvencies
BY SUSAN KELLY, PARTNER, SQUIRE SANDERS (UK) LLP
It would have been nice to have written this article about "European Restructuring and Insolvency Law,"
but this mythical beast does not exist.
There are 27 countries in the European
Union (EU), each with its own language
and its own reorganization proceedings
that aim to help distressed companies.
These different regimes are successful
to a greater or lesser extent, making
some member states more attractive
than others as venues for reorganization.
In particular, the laws of England
and Wales provide such flexibility
that they are becoming venues of
choice for companies from all over,
including the Netherlands, Germany,
Greece, and Vietnam in the most
recent cases. Scotland and Northern
Ireland have slightly different, but
very similar, laws. Southern Ireland
is an independent country with
a very different legal system.
Each year in Europe there are
an estimated 200,000 company
insolvencies. More than half of
companies do not survive their first
five years in business, and more than
1. 7 million jobs are lost every year as a
result. One in five of those companies
has international operations that cross