Some member states feel the
commission did not go far enough
on the issue of group coordination
proceedings and would have preferred to
see a system allowing for a single pan-European appointment. In other words,
an insolvency practitioner appointed for
the parent company in one jurisdiction
would have powers to deal with all
subsidiaries, wherever they were located.
The commission shied away from this
compulsory coordination approach to
dealing with multinational groups and
preferred to continue with an entity-by-entity approach. The new rules, however,
would place stronger obligations on
insolvency practitioners and the courts
in each member state to cooperate and
communicate effectively with their
counterparts in other member states.
It is also a great relief in the U.K. that the
Parliament rejected the commission's
proposal to exclude from the regulation
any procedure that was not opened
by a court hearing. This would have
excluded most administrations and
company voluntary arrangements, some
of the more flexible English procedures
used in cross border restructurings.
Susan Kelly is a partner in the Squire Sanders
(UK) LLP Restructuring & Insolvency practice
group. She leads the practice group in the U.K. and
Europe and co-chairs Squire Sanders’ international
restructuring practice. Kelly’s practice covers a
broad range of insolvency, both contentious and
noncontentious; lender security reviews and
enhancement; reconstruction; turnaround; and
business support. She has particular experience
in acting for financiers, including top tier banks,
major accounting firms, international asset based
lenders, and multinational corporations.
Other Squire Sanders partners contributing to this
article were Fernando González in Madrid, Spain;
Andreas Lehmann in Frankfurt, Germany; Antoine
Adeline in Paris, France; Ákos Erős in Budapest,
Hungary; and Helen Kavanagh in Leeds, U.K.
Keeping Pace with Change
As the inexorable march toward
corporate globalization continues
unabated, it is vital that legislation
keeps pace with the rapidly changing
corporate environment. Companies
are not constrained by national
boundaries, and it is vital that the law
provides an effective, efficient system
for rescuing distressed businesses
operating in multiple jurisdictions. It
remains to be seen whether details of
the legislation will live up to the rhetoric
surrounding the recommendations. J
1 Magyar Telecom BV  EWHC
3800 (Ch) ( 3 December 2013).
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