The core thesis of this book, shortly reviewed here, is that cross-border insolvency rules of all kinds are founded on, and can be traced back to, basic values and that they aim to pursue and enforce such values. The book Principles of Cross-border Insolvency Law is written by professor Reinhard Bork, a very productive scholar of the University of Hamburg. It was written during a Visiting Fellowship at Magdalen College, University of Oxford, and covers cases and literature published before 30 June 2016. Where many insolvency proceedings have increasingly cross-border effects, which are regulated by many international regulations, Bork tries to find an answer to the question of what the underlying principles of international (cross-border) insolvency laws are and how they can be used for the purpose of further harmonising cross-border insolvency law in the EU and beyond. These rules are e.g. the European Insolvency Regulation (recast) and the UNCITRAL Model Law. He also takes account of available soft law and best practices, such as the American Law Institute (ALI) Principles for the NAFTA States, and the Global Principles for Cooperation in International Insolvency Cases of 2012 and the Global Guidelines for Court-to-Court Communications in International Insolvency Cases of 2012, both written by Ian Fletcher and myself (and recently re-published, see http://bobwessels.nl/2017/09/2017-09-doc1-ali-iii-global-principles-and-guidelines-2012/). Also the EU Cross-Border Insolvency Court-to-Court Cooperation Principles and Guidelines (also known as JudgeCo Principles and Guidelines (see http://www.tri-leiden.eu/project/categories/eu-judgeco-project/), as well as the national laws such as Chapter 15 US Bankruptcy Code or Sch. 1 Cross-Border Insolvency Regulation 2006) form a part of his study. The matrix for the research comes from the identification, distinguishing and grouping of several principles into three groups: conflict of laws principles (e.g. unity, universality, equality, mutual trust, cooperation and communication, subsidiarity, proportionality), procedural principles (e.g. efficiency, transparency, predictability, procedural justice, priority) and substantive principles (e.g. equal treatment of creditors, optimal realisation of the debtor’s assets, debtor protection, protection of trust (for secured creditors or contractual partners), social protection (for employees or tenants)). Having grouped and identified his vast area of the object of research in jurisdictional, procedural and substantive principles, conflicts of these principles are examined. Bork’s excellent scholarly treatment will not only be useful for scholars, but will surely help judges building up argumentation and balancing interests when deciding cases, assist practitioners in analysing their position in negotiations or litigation as well as legislators looking for input to law reform or harmonising certain concepts. Especially for PhD students professor Bork’s principle-based approach provides inspiration for evaluating research and may lead to reconsider proposals for shaping and improving cross-border insolvency law. The innovative view presented in the book has as a major advantage that the discussion well goes beyond the traditional rather old school controversy between territoriality and universality. There is a tempting challenge, however, too. Gradually during the last decade, many EU Member States as well as the EU itself have been in a state of new orientation to the function and the workings of insolvency law, in short, a gradual shift in paradigm from the traditional view for insolvency as a creditor initiated collective collecting device to a debtor focused and stakeholder driven mechanism to continue financially troubled, but viable businesses. As far as I can see this new orientation is not accompanied by a vivid, critical debate initiated by one or more universities or practitioners’ organisations. In our recent report on Business rescue in Insolvency Law (September 2017, see http://bobwessels.nl/2017/09/2017-09-doc3-eli-business-rescue-report-published/) professor Stephan Madaus and myself have tentatively suggested that developing a rescue culture – many EU countries are in the midst of it – does not simply transform insolvency law, but rather gives birth to a new and separate field of law governed by its very own principles and functions: restructuring law. Professor Bork’s principled approach may very well enable to critically reflect on their usefulness in the area of (cross-border) restructuring, evaluate their analytical decisiveness for business rescue or assist to connect to principles which may be identified within business rescue. Reinhard Bork, Principles of Cross-Border Insovency Law, 2017. Ordering information: http://intersentia.com/en/principles-of-cross-border-insolvency-law.html.
Today, October 2, 2107, the management of SSRN's eLibrary (Social Science Research Network, see www.ssrn.com) writes to me that the paper, "INSTRUMENT OF THE EUROPEAN LAW INSTITUTE - RESCUE OF BUSINESS IN INSOLVENCY LAW", was recently listed on SSRN's Top Ten download list for the Corporate Governance & Law eJournal: "As of 02 October 2017, your paper has been downloaded 99 times." That's great news, as (1) it's rather odd to have the paper (a 400 pages report, see https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3032309, as well as http://bobwessels.nl/2017/09/2017-09-doc3-eli-business-rescue-report-published/) listed under 'corporate governance', rather than 'law', but more importantly that my colleague and co-reporter, professor Stephan Madaus, owes me a bottle of good German wine, as we made a bet for such a bottle if in 3 months after the presentation of our report (which was September 6, so: per December 6, 2017) it would have been downloaded from the ssrn website (mind you, only that website!) 100 or more times. With 99 downloads in less than 4 weeks (none of them was mine, no manipulation on this side!) I am confident a bottle is coming my way! For the real lawyers: which law applies to a cross-border gamble between a German and Dutch professor, only orally concluded in Vienna, Austria, with alcohol as a subject? Note, the picture is taken by Theun Okkerse, 'View of Dordrecht seen from Papendracht, The Netherlands', 2016, used as cover of our (Dutch) book Divers Dordrecht, Verhalen over de stad, see
An evergreen in 30 years, now in its 20th edition Sealy & Milman: Annotated Guide to the Insolvency Legislation 2017 has recently been published. From persons I know in UK’s legal and accountancy practice, Sealy and Milman is regarded as a standard reference work in insolvency practice. The blue book (the predominant colour used on its cover over the last 20 years) contains 2 Volumes, with in all some 2800 pages, and the present edition contains the greatest single change to national (England and Wales) insolvency legislation of this century, especially with the introduction of the Insolvency (England and Wales) Rules 2016 (SI 2016/1024). The method used for the treatment of topics is that legislative texts are followed by annotations to provide background, comment and assistance for practitioners. Like others, this edition generally provides annotated commentary and clarification on the legal and practical implications of the insolvency legislation, whilst many additional statutes and regulations have also been reproduced. Readers should have all the information in one reliable source. The core of Volume I is the Insolvency Act 1986 and the Rules 2016 mentioned. Volume 2 covers among others the Company Directors Disqualification Act 1986, the EU Regulation on Insolvency Proceedings 2015 (2015/848), the UNCITRAL Model Law on Cross-Border Insolvency and the Cross Border Insolvency Regulations 2006. It also includes the text, in whole or in part, of over 20 Acts, over 50 Statutory Instruments and a number of practice directions. Compared to German and Dutch equivalents, the annotations, for instance, to the Recast EU Insolvency Regulation 2015 (in the book abbreviated as ‘EURIP’) are rather limited, many times grouped around a set of articles or a Chapter, not the individual articles themselves and mainly focused on English sources. However, I see Sealy and Milman cited in English court cases several times, as well as for instance in cases decided in Northern Ireland or by the High Court of Ireland. This confirms that Sealy & Milman’s books and their commentary offer guidance to judges and practitioners alike. Sealy & Milman: Annotated Guide to the Insolvency Legislation 2017, 2 volumes. Ordering information: http://www.sweetandmaxwell.co.uk/Catalogue/ProductDetails.aspx?productid=719328&recordid=7084
CERIL (Conference on European Restructuring and Insolvency Law) is an independent non-profit, non-partisan, self-supporting organisation of persons committed to the improvement of restructuring and insolvency laws and practices in Europe, the European Union and its Member States. On 26 September 2017 CERIL issued its first Statement (Statement 2017/01) on Transactions Avoidance Laws. Initiated and chaired by Prof Reinhard Bork, University of Hamburg, a CERIL working group dealt with two of the fundamental principles of transactions avoidance laws: the principle of equal treatment of creditors and the principle of protection of trust. It turned out that these principles are enforced in all jurisdictions examined in this study, albeit in different ways. The principle of equal treatment of creditors is key when it comes to justifying the avoidance of preferences, whereas other principles must be enforced where the defendant was not a creditor prior to the transaction (e. g. transactions at an undervalue). The law of preferences mirrors the underlying principles in most countries (with some exceptions for England and Wales and Spain). On the one hand, national transactions avoidance laws require (directly or indirectly) some kind of link to the debtor’s substantive insolvency, which is required as well as justified by the principle of equal treatment of creditors. On the other hand, in almost all countries legitimate expectations are protected by fixed suspect periods and especially by the requirement that the defendant knew of the debtor’s financial crisis, which is supported by the principle of protection of trust. Aside from differences in details (e.g. the length of the relevant suspect period), the avoidance laws involved in this study share this general approach and can be justified by the principles mentioned. Many national laws provide additional constraints as well as extensions. Avoidance is frequently facilitated and protection of trust is thus restricted for closely related parties. As opposed to this, the defendant’s expectations to keep what they have received are granted additional protection by restricting transactions avoidance to acts of the debtor, by allocating the burden of proof to the insolvency practitioner and by the use of limitation periods. All in all, it seems promising to apply a principle-based approach to national insolvency laws. Carving out the fundamental commonalities instead of stressing the differences in details by focussing on the underlying principles and their reflection in national insolvency rules supports all efforts to understand and – eventually – harmonise insolvency laws. However, the approach of this pilot research project must be expanded. The next step should be to apply the principlebased approach to the entirety of transactions avoidance law and gradually to other fields of insolvency laws. The results of these future research projects may help to incrementally harmonise this field of law. The full Report is available as Report 2017/01 on CERIL’s website www.ceril.eu. This site also informs about the organisation of CERIL (of which I am proud to be the chair) and its activities. In the meantime, professor Reinout Vriesendorp, secretary of CERIL (email@example.com), or the Reporter, professor Reinhard Bork (firstname.lastname@example.org), welcome the opportunity to further inform about CERIL or the contents of Report 2017/01.
Established in 2016, the Asian Business Law Institute (ABLI) is an Institute based in Singapore. ABLI initiates, conducts and facilitates research and produces authoritative texts with a view to providing practical guidance in the field of Asian legal development and promoting the convergence of Asian business laws. See http://abli.asia/. In August 2017, ABLI in close cooperation with the International Insolvency Institute (III, see www.iiiglob.org) launched a joint project between ABLI and III, titled the Asian Principles of Restructuring. In summary the Project involves the formulation of principles of restructuring, both in and out of court. It is hoped that the principles will advance the convergence of philosophies and approaches to restructurings and the management of insolvencies in Asia, serving as a key reference tool for all stakeholders in Asia. Over the longer term, this will facilitate convergence of Asian insolvency laws. The Project involves two phases with a timeframe of two years. The first phase is a mapping exercise of the business reorganization regimes in select Asian jurisdictions. The second phase will involve an examination of the output of the mapping exercise to identify the areas of similarity and formulate principles for court-based and out of court restructuring that will be uniquely tailored to Asia. I am delighted to have been asked as a member of the Advisory Committee which will provide supervision and guidance to the Project. For more info on the project, see the website.