The Recast European Insolvency Regulation
04 July 2017
The substantive provisions of the EU Regulation on Insolvency Proceedings 2015 (the Recast Regulation) came into force on 26 June 2017. The previous European insolvency regulation - the EC Regulation on Insolvency Proceedings 2000 (the Original Regulation) - was possibly the most significant piece of European legislation in the insolvency arena in recent times and its scope has now been expanded by the Recast Regulation.
By way of background, the Original Regulation was not a harmonisation of Member States’ insolvency laws; it was
concerned with regulating (as between Member States) jurisdiction to open insolvency proceedings, determining the
applicable law in those proceedings and providing automatic recognition of those proceedings throughout the EU. The
Recast Regulation retains these core parameters and does not make any attempt to harmonise domestic insolvency regimes (although there are moves afoot in Europe to try to do just that) – but the expansion to cover pre-insolvency procedures and the introduction of new and enhanced cooperation and coordination tools means the Recast Regulation has a, potentially, greater (or deeper) reach when it comes to cross-border restructurings and insolvencies throughout Europe. Whether, in practice, it will have a dramatic effect (or dramatically different effect to its predecessor) on creditor/debtor decision-making in, or the course of, cross-border restructurings and insolvencies, only time will tell.