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Welcome / Blog Archive / English / 2022-06-doc1 Dominant position of the main IP under EIR 2015

2022-06-doc1 Dominant position of the main IP under EIR 2015

To accompany lectures abroad (ie outside the Netherlands) I am providing this text, taken from Bob Wessels, International Insolvency Law Part II. European Insolvency Law (4th. ed., 2017, published by Wolters Kluwer). By the way a 5th edition if forthcoming, aiming at late 2022. In the present par. 10764b I provide examples of powers of the main insolvency practitioner (especially in its relation to any secondary insolvency proceeding). These powers include the following:
1. Where an action derives directly from the insolvency proceedings and is closely linked with them (such as avoidance actions and such action is related to an action in civil and commercial matters against the same defendant, e.g. an action based on civil liability rules or tort), the IP may bring both actions before the courts of the Member State within the territory of which the defendant is domiciled, or, where the action is brought against several defendants, before the courts of the Member State within the territory of which any of them is domiciled, provided that those courts have jurisdiction pursuant to Brussels I Recast (1215/2012) (Article 6(2) EIR 2015);
2. The IP appointed in main proceedings may in any other Member State claim through the courts or out of court that moveable property was removed from the territory of the State of the opening of proceedings to the territory of that other Member State after the opening of the insolvency proceedings. The insolvency practitioner may also bring any action to set aside which is in the interests of the creditors (Article 21(2)). It is presumed that the main IP has a primary right to claim these assets;
3. The main IP has the right to request the return to the main proceedings of anything already obtained by creditors as they have satisfied their claims by any means on the assets of the debtor situated in the other Member State (Article 23(1));
4. The main IP (or the debtor in possession, DIP) shall request that notice of the judgment opening insolvency proceedings and, where appropriate, the decision appointing the insolvency practitioner be published in any other Member State where an establishment of the debtor is located in accordance with the publication procedures provided for in that Member State. The Main IP (or the DIP) may request that the information contained in the notice be published in any other Member State where the main IP (or the DIP) deems it necessary in accordance with the publication procedures provided for in that Member State (Article 28(1) and (2));
5. Where the law of a Member State in which an establishment of the debtor is located and this establishment has been entered into a public register of that Member State, or the law of a Member State in which immovable property belonging to the debtor is located, requires information on the opening of insolvency proceedings to be published in the land register, company register or any other public register, the mail IP (or the DIP) shall take all the necessary measures to ensure such a registration (Article 29(1));
6. In order to avoid the opening of secondary insolvency proceedings, the main IP may give a unilateral undertaking in respect of the assets located in the Member State in which secondary insolvency proceedings could be opened, that when distributing those assets or the proceeds received as a result of their realisation, it will comply with the distribution and priority rights under national law that creditors would have if secondary insolvency proceedings were opened in that Member State (Article 36(1));
7. The main IP has the power to apply for opening of secondary proceedings in other Member States (Article 37(1)(a));
8. A court seised of a request to open secondary insolvency proceedings shall immediately give notice to the main IP (or the DIP) and give it an opportunity to be heard on the request. Where the main IP has given an undertaking (in accordance with Article 36), the court in the ‘secondary’ state shall, at the request of the main IP, not open secondary insolvency proceedings if it is satisfied that the undertaking adequately protects the general interests of local creditors (Article 38(1) and (2));
9. Where a temporary stay of individual enforcement proceedings has been granted in order to allow for negotiations between the debtor and its creditors, the court, at the request of the main IP (or the DIP), may stay the opening of secondary insolvency proceedings for a period not exceeding 3 months, provided that suitable measures are in place to protect the interests of local creditors. The court also may order (i) protective measures to protect the interests of local creditors by requiring the main IP (or the DIP) not to remove or dispose of any assets which are located in the Member State where its establishment is located unless this is done in the ordinary course of business, or (ii) order other measures to protect the interest of local creditors during a stay, unless this is incompatible with the national rules on civil procedure (Article 38(3));
10. The main IP may challenge the decision to open secondary insolvency proceedings before the courts of the Member State in which secondary insolvency proceedings have been opened on the ground that the court did not comply with the conditions and requirements of Article 38 (Article 39);
11. He can ask IPs in the secondary proceedings for information (Article 41(2)(a));
12. He can ask IPs in the secondary proceedings to explore restructuring possibilities for the debtor (Article 41(2)(b);
13. He can ask IPs in the secondary proceedings to coordinate the administration and the realisation or use of the debtor’s assets and affairs (Article 41(2)(c);
14. He can demand that the secondary IP(s) cooperate with him (Article 41(1));
15. In order to facilitate the coordination of main, territorial and secondary insolvency proceedings opened in respect of the same debtor the main IP shall cooperate and communicate with any court before which a request to open secondary insolvency proceedings is pending or which has opened such proceedings (Article 43(1)(a));
16. The main IP shall, under given conditions, lodge in other proceedings claims which have already been lodged in the main proceedings (Article 45(2));
17. He has the power to participate in the other proceedings on the same basis as the creditors (Article 45(3));
18. He may request a stay of the process of realisation of assets in these secondary proceedings (Article 46(1));
19. He may request the termination of such a stay (Article 46(2));
20. He may propose a restructuring plan in the secondary proceedings (see Article 47(1));
21. The closure of insolvency proceedings shall not prevent the continuation of other insolvency proceedings concerning the same debtor which are still open at that point in time; where insolvency proceedings concerning a legal person or a company in the Member State of that person’s or company’s registered office would entail the dissolution of the legal person or of the company, that legal person or company shall not cease to exist until any other insolvency proceedings concerning the same debtor have been closed, or the IP(s) in such proceedings have given consent to the dissolution.
22. The main IP has the power to collect any remaining assets from the secondary proceedings if all claims in these proceedings have been met (Article 49).
23. The main IP may request the court of the Member State in which secondary insolvency proceedings have been opened to order the conversion of the secondary insolvency proceedings into another type of insolvency proceedings listed in Annex A (Article 51);
24. As soon as insolvency proceedings are opened in a Member State (the court of that State having jurisdiction or) the insolvency practitioner appointed by that court shall immediately inform the known foreign creditors (Article 54(1)).
25. The main IP (the court of the DIP) may require the creditor to provide a translation in the official language of the State of the opening of proceedings or, if there are several official languages in that Member State, in the official language or one of the official languages of the place where insolvency proceedings have been opened, or in another language which that Member State has indicated it can accept.
26. Where the main IP (the court or the DIP) has doubts in relation to a claim lodged, it shall give the creditor the opportunity to provide additional evidence on the existence and the amount of the claim (Article 55(7)).
In the list above, the position of the IP in insolvency proceedings concerning members of the same group has been left out.

Hope it’s useful for your practice.