National Policy Objectives from an EU Perspective: UK Corporate Rescue and the European Insolvency Regulation

Abstract

This note reviews the implementation of EC Council Regulation 1346/2000 on insolvency proceedings by UK courts. Two recent decisions in the United Kingdom – Hans Brochier Holdings Ltd v. Exner (HBH) and Re Collins & Aikman Europe SA (C&A) – provide an indication of how UK courts will interpret the Regulation while implementing the United Kingdom's newly established corporate insolvency regime and, specifically, the Enterprise Act 2002 and its overriding objectives. In HBH, the Court's decision to regard the German forum as the company's centre of main interest and thus as the forum for the main insolvency proceedings was influenced by the Court's perception that certain social security protections would only be provided to the company's employees if the company's insolvency was administered in Germany, thus providing the company employees – who formed part of the company's creditors ‘as a whole’ – better protection in insolvency. In C&A, the practice of providing creditors with oral assurances that their respective national insolvency protections would be respected by the administrators was approved by the Court. This is consistent with the purpose of furthering the objective of ‘rescue’, as the secondary proceedings may only be opened with a view to winding up the company.