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Blog 2017

2017-10-doc2 Bottle of German wine?

Today, October 2, 2107, the management of SSRN's eLibrary (Social Science Research Network, see 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, as well as 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 DSC01000

2017-09-doc12 20th edition Sealy & Milman

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:

2017-09-doc11 1st CERIL Statement on Transaction avoidance laws

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 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 (, or the Reporter, professor Reinhard Bork (, welcome the opportunity to further inform about CERIL or the contents of Report 2017/01.

2017-09-doc10 Launch of Asian Principles of Restructuring Project

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 In August 2017, ABLI in close cooperation with the International Insolvency Institute (III, see 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.

2017-09-doc9 2016 book of Look Chan Ho

With the date of this publication cited as at Buddha’s Birthday 2016, in the book ‘Cross-Border Insolvency: Principles and Practice' (Sweet & Maxwell, 2016, xlv + 351 pages), its author Look Chan Ho, discusses English cross-border insolvency law. The author is dissatisfied that this area of law lacks a solid taxonomic order and that practices relies too much on improvisation. These observations are serious as the author is a well-experienced practitioner and over the years has demonstrated to be a clever analyst of many topics of cross-border insolvency law. Improvisation, however, does not have to be a bad thing in this complex legal area. It may assist in looking for the most pragmatic solution and a fair outcome; it may rather be the arbitrariness and unpredictability that causes discontent. The author presents a unique approach in his treatment of English’ framework of rules and regimes from the perspective of conflict of laws with a view to strengthening the understanding and practice of cross-border insolvency. He analyses the whole corpus of cross-border insolvency regimes from three conflicts perspectives, namely: (i) jurisdiction to commence insolvency proceedings, (ii) recognition and enforcement of foreign insolvency proceedings, and (iii) choice of law. In such a treatment, he argues, the principles of cross border insolvency can be compared and contrasted across the whole body of cross-border insolvency law. The focus of the book is mainly English law, which offers, as the author points out, ‘… the widest and most complex range of cross-border insolvency regimes in the world’, which includes the EU Insolvency Regulation, Brussels I, UNCITRAL Model Law on Cross- Border Insolvency, European rules re the reorganisation and winding up of banks and insurers, several domestic English acts and the sheer enigma of common law, leading to the inclusion of court cases from Bermuda, Hong Kong, Singapore and South Africa. All these applicable cross-border regimes have been considered in two ways: (1) what is the law?, and (2) how best to evaluate these different rules. Under the flag of jurisdiction, a comparison is made of the jurisdiction of the English court to commence insolvency proceedings, more particularly liquidation, administration, company voluntary arrangement and scheme of arrangement. The theme of recognition and enforcement deals with the recognition and enforcement by the English court of a foreign liquidation or reorganisation proceeding and for instance foreign insolvency judgments, e.g. a foreign judgment ordering the defendant to return property on the basis of violation of foreign fraudulent conveyance law Enforcement and choice of law deal with forms of relief that may be obtained from the English court following the recognition of foreign insolvency proceedings. Choice of law issues, the author notes, have been considered fully. As this area of the law is most undeveloped, this part is organised according to the typical relief sought in cross-border cases, including such topics as discharge of debt, set-off, and avoidance of antecedent transactions. All the cross-border regimes have been compared and contrasted in order to state the current position and to offer recommendations going forward. Under the readers of the book one would expect practitioners. They will find a helpful and practical treatment of queries that often occur in practice, including a systematic clarification, e.g. nine points of view to take into account when deciding about a debtor’s COMI (although the 9th (‘the standard of proof is the standard of balance of probability’) is not easy to understand for non-English readers) and that the Chancellor’s incorrect view regarding COMI in the Stanford case had already been signalled by me in 2010 on this blog as well as in my book regarding International Insolvency Law. Another example for support in practice is Ho’s analysis of case law leading to nine propositions regarding the demarcation between the Insolvency Regulation and Brussels I. This should suffice to conclude that, given the depth and detail of the treatment and the sharp analysis presented, the readers also will be scholars. The reader should be prepared to cope with strong or pedantic views, such as that the pari passu principle is ‘often misunderstood’, that English’ state of law regarding cross-border insolvency is ‘chaotic’, that the English courts’ current approach to the extra-territorial application of insolvency provisions is ‘deeply unsatisfactory’, that the UNCITRAL Model Law is ‘a profoundly misguided document’ and that the Guide to Enactment and Interpretation of the Model Law seems misconceived and may hinder the Model Law’s cause. Nearly all chapters contain extensive footnoting with references to cases and literature, however, rather in common with all literature provided by English authors, it suffers from their unmistakable disease of mastering only one language and even within these sources limiting research to English authors. Look Chan Ho, Cross-Border Insolvency: Principles and Practice, Sweet & Maxwell, 2016, xlv + 351 pages. For ordering information, see