The Never-Ending Challenge of Defining COMI (This Time Due to Groups of Companies)
10 Pages Posted: 9 Jul 2019
Date Written: June 27, 2019
Two years after the Recast European Insolvency Regulation (EIR) came into effect and just weeks after the Second Chance Directive was adopted by the European Council, I conclude that regulating cross-border insolvency legislation at the EU-level is an ungratifying task. Not only is European insolvency law one of the most trending and ever-changing fields of law nowadays, but it is also constantly challenged by the human creativity and evolution of business strategies. Just within the past two decades, EU cross-border insolvency law has, (i) witnessed the introduction of COMI (Centre of Main Interests) as the unique connecting factor determining both jurisdiction and governing law and (ii) gone through a major revision, taking into account EU case law and resulting in an adjustment of the definition of COMI. (iii), it substantially shifted the course of resolving insolvencies from mandatory liquidation to the preferred reorganizations (maintaining the debtor’s going concern value) and finally (iv), included groups of companies under the scope of the EIR. This article aims to analyze the latter - the long-anticipated inclusion of groups with emphasis on the current definition of COMI, as well as whether or not this works well together with the concept of group insolvencies.
Keywords: European Insolvency Regulation, COMI, EIR Recast, corporate restructuring, insolvent groups of companies
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