Gerard McCormack

Something Old, Something New: Recasting the European Insolvency Regulation

This paper critically evaluates the recasting of the European Insolvency Regulation - Regulation (EU) 2015/848 - in the context of the EU Europe 2020 growth strategy. According to the Council of Ministers, through the protection of creditors and the survival of business, the new legislation should contribute to the preservation of employment in these challenging times. The paper argues that worthwhile improvements have been made by extending the scope of the regulation; clarifying and confirming contentious areas of interpretation; smoothening the inter-relationship between main and secondary insolvency proceedings and improving information flows. But the overall effect is to enhance complexity. The recast Regulation carries the whiff of political compromise and, at times, seems to point in different directions at the same time.

BANKRUPTCY FORUM SHOPPING: THE UK AND US AS VENUES OF CHOICE FOR FOREIGN COMPANIES

This paper critically evaluates ‘forum shopping’ possibilities offered by the UK and US in bankruptcy/insolvency cases. While recognizing that in some quarters forum shopping has a bad name, the paper makes the point that strategic manoeuvring and transaction planning is what litigation and case management is all about. Certain countries are popular as forum shopping venues because of substantive law or the procedural advantages brought about by litigating in that country. The paper concludes that while the UK may have shut its doors too firmly against foreign forum shoppers, the US is too much a safe haven. The paper calls for a measure of jurisdictional restraint through raising entry barriers. While a bit of jurisdictional competition in insolvency law-making may be no bad thing, the US approach runs the risk of undermining important policies considered important by other countries such as the protection of employees and the public purse. It is also asymmetrical in that US bankruptcy jurisdiction is assumed in situations where, if foreign countries had acted on a similar basis, US recognition of the foreign proceedings would be denied.

Retention of Title and the EC Late Payment Directive

This article considers the retention of title provision (Article 4) in the recently enacted EC Late Payment Directive. The Directive aims to bolster the position of an unpaid supplier of goods or services in commercial transactions by establishing a statutory right to interest on overdue debts but also, and more controversially, it obliges member states to recognise contractually agreed-upon retention of title clauses in contracts for the sale of goods. This paper addresses this aspect of the Directive in detail, and puts forwards the view that the provision is not only deficient in terms of drafting, but also suffers from some serious conceptual flaws.

European Insolvency Law

Critically analysing the substantive law of insolvency in the EU countries as a whole, this book carries out horizontal cross-cutting analysis of the data gathered from a study of national insolvency laws.

AMERICAN PRIVATE LAW WRIT LARGE? THE UNCITRAL SECURED TRANSACTIONS GUIDE

This article provides a critical evaluation of the main provisions of the UNCITRAL Legislative Guide on Secured Transactions. It examines the Guide in the context of other international and national secured transactions instruments including article 9 of the United States Uniform Commercial Code. The clear objective of the Guide is to facilitate secured financing. It is very facilitating and enabling, and permits the creation of security in all sorts of situations. Security is seen as a good thing, through enhancing the availability of lower-cost credit. The paper suggests that this closeness in approach to article 9 is likely to militate against the prospects of the Guide gaining widespread international acceptance. This is the case for various interlocking reasons including the battering that American legal and financial norms have taken with the global financial crisis.

Swelling Corporate Assets: Changing What is on the Menu

This article considers the transactional avoidance provisions in the Insolvency Act 1986 and, in particular, sections 249 and 245, and addresses the theoretical bases underlying the said provisions. Section 239 invalidates transactions entered into by an insolvent company which have the effect of giving one creditor an advantage over other creditors in the event of a companys insolvent liquidation and provided that the company was influenced by a desire to produce this result. Section 245 invalidates floating charges granted by insolvent companies to secure past indebtedness within a certain period prior to liquidation or administration. The article asks whether these two provisions should continue to coexist and suggests that the “influenced by” criterion in section 239 might best be replaced by a results-based test (has there been a preference in fact?) supplemented by suitable defences. Section 243 of the Insolvency Act, which applies to Scotland, already adopts this approach and it is also the approach found in Article 547 of the US Bankruptcy Act. The article also examines the practical operation of the American provision and its theoretical underpinnings.

Transplanting chapter 11 of the US bankruptcy code into Singapore's restructuring and insolvency laws: Opportunities and challenges

ABSTRACT In 2017, Singapore introduced wide-ranging reforms to its insolvency and restructuring laws with a view to enhancing its attractiveness as an international centre for debt restructuring. Central to these reforms is the transplantation (with modification) of certain provisions from Chapter 11 of the US Bankruptcy Code including the automatic moratorium, cross-creditor cram-down, rescue financing and prepacks. Drawing upon the US experience and similar reform proposals in the EU (including the UK), we critically evaluate the impact of the new Singapore law. We argue that there remain challenges in ensuring that the transplantation works well and highlight the possible unintended consequences of such transplantation.

Business restructuring law in Europe: making a fresh start

ABSTRACT This paper critically examines a new European approach to business failure and insolvency. It addresses the broader political dimensions of the subject and sets the new European approach in the context of the objectives of insolvency law to rescue viable businesses and to liquidate non-viable ones. The comparable US procedure – Chapter 11 of the Bankruptcy Code – is used as a reference point for detailed analysis. The paper suggests that the new approach is of particular importance and adds value in those EU Member States that have underdeveloped restructuring frameworks. It is also suggested however, that any measures of legislative harmonisation should be of the minimum harmonisation variety leaving scope for regulatory differentiation and allowing national governments to build on local restructuring frameworks and domestic business practices that work well.

Reconciling European Conflicts and Insolvency Law

This paper focuses critically on European conflicts and insolvency law—examining and evaluating the relationship between the Jurisdiction and Judgments Regulation and the Insolvency Regulation. The Regulations are founded on the notion of judicial cooperation in civil matters linked to maintaining and developing an area of freedom, security and justice. The paper asks whether these high-minded ideals have been achieved in practice. It also asks whether the recent recasting of the Jurisdiction and Judgments Regulation, and the proposals for revision of the Insolvency Regulation will improve the situation. The paper concludes that the ideals have not quite been achieved and the reform proposals provide only a partial solution.