Insolvency Forum Shopping, Revisited

Hamburg Law Review 2017, p 38-59

21 Pages Posted: 26 Dec 2017

See all articles by Wolf-Georg Ringe

Wolf-Georg Ringe

University of Hamburg - Institute of Law & Economics; University of Oxford - Faculty of Law; European Corporate Governance Institute (ECGI)

Date Written: December 2017

Abstract

The phenomenon of forum shopping in insolvency situations has long troubled policy makers and scholars alike. Forum shopping describes the situation where a debtor engages in regulatory arbitrage by modifying certain criteria that allow them to benefit from a different, more favourable insolvency law or jurisdiction. The European Insolvency Regulation, an instrument determining the competent courts and the applicable law in cross-border insolvency proceedings, has long sought to curb such efforts. A major reform adopted in 2015 has the specific objective of further restricting abusive versions of forum shopping, in particular by introducing a ‘suspension period’ for forum shopping activities carried out shortly before the debtor files for insolvency. This article demonstrates that these efforts fail to achieve a satisfactory response to forum shopping. Further, forum shopping with use of an English scheme of arrangement remains entirely outside the Regulation’s scope.

Keywords: forum shopping, regulatory arbitrage, insolvency, scheme of arrangement

JEL Classification: K22

Suggested Citation

Ringe, Wolf-Georg, Insolvency Forum Shopping, Revisited (December 2017). Hamburg Law Review 2017, p 38-59. Available at SSRN: https://ssrn.com/abstract=3091071

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

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St Cross Road
Oxford, OX1 3UL
United Kingdom

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

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://ecgi.global/users/wolf-georg-ringe

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