Forum Shopping Under the EU Insolvency Regulation

32 Pages Posted: 7 Aug 2008 Last revised: 14 Apr 2010

Wolf-Georg Ringe

University of Hamburg - Institute of Law & Economics; University of Oxford - Faculty of Law

Date Written: August 1, 2008

Abstract

Cross-border forum shopping for the benefit of a different insolvency law regime has become popular within the European Union in recent years. Yet legislators, courts and legal scholarship react with suspicion when debtors cross the border only to profit from a different insolvency law system. The most prominent legal tool, the European Insolvency Regulation, is based on the assumption that forum shopping is bad for the functioning of the European Internal Market.

This paper questions the hostile attitude towards the phenomenon of forum shopping. It is argued that forum shopping can have beneficial effects both for the company and for its creditors, and that strong safeguards for creditors who oppose the migration are in place. Furthermore, the validity of the COMI approach of the Regulation under the fundamental freedoms of the Treaty is questioned; it is suggested that the current regime needs to be amended. The proposed new system would enable more corporate mobility within the European Union and create more legal certainty for all constituencies at the same time.

Keywords: forum shopping, bankruptcy, regulatory competition, insolvency regulation

JEL Classification: F15, G33, G34, H73, K22, L22

Suggested Citation

Ringe, Wolf-Georg, Forum Shopping Under the EU Insolvency Regulation (August 1, 2008). Oxford Legal Studies Research Paper No. 33/2008. Available at SSRN: https://ssrn.com/abstract=1209822 or http://dx.doi.org/10.2139/ssrn.1209822

Wolf-Georg Ringe (Contact Author)

University of Hamburg - Institute of Law & Economics ( email )

Johnsallee 35
Hamburg, 20148
Germany
+49 40 42838 7787 (Phone)
+49 40 42838 6794 (Fax)

HOME PAGE: http://www.ile-hamburg.de

University of Oxford - Faculty of Law

St Cross Building
St Cross Road
Oxford, OX1 3UL
United Kingdom

HOME PAGE: http://www.law.ox.ac.uk/people/wolf-georg-ringe

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