Regulatory copy and paste: the allocation of assets in cross-border insolvencies – methodological perspectives from the Nortel decision

Abstract

This article focuses on a general methodological problem highlighted in the specific context of cross-border insolvencies: under what conditions can legal rules and principles embedded in one specific legal context be transferred to another? Using the recent Nortel decision by the Court of Justice of the European Union, the author will ask whether the Court would have upset the institutional balance when filling the regulatory gap as to a lis pendens rule in the European Insolvency Regulation (EIR) by reference to the Brussels I regime. The article will then analyse in detail the coherency of the EIR’s rules for assigning the debtor's assets to partial insolvency estates; in particular, whether considerations peculiar to conflicts of laws adequately express the purposes and interests underlying insolvency-related asset allocation. By tracing potential consequences that may arise from legal transplants lacking full functional equivalence, the article will show that the concept of allocation as currently outlined in Article 2(g) EIR lacks comprehensiveness and functional coherence. From this analysis, the author will develop a differing concept of allocation in line with the general structure of the Insolvency Regulation and with a special focus on claims and intellectual property rights.