Abstract
The study covers the EU Insolvency Regulation, in which the central question is how the Regulation deals with rights in rem vested on debtor’s assets, and against who insolvency proceedings are commenced. Pursuant to Article 5 these rights are not affected by the universal applicable insolvency law from ‘Member State A’ provided that the collateral security is located in ‘Member State B’ at the time proceedings commence. The provision's rationale is to protect rights in rem from a surprise attack of the applicable insolvency law. Article 5 yields however one major concern. Its application namely hampers the restructure of companies, because if the secured creditor as a consequence realizes the collateral security then the sale of debtor’s estate as a whole, needed for a successful restructuring, becomes impossible. With this in mind, the subsequent question is to what extent the instrument of communication and coordination in cross-border insolvencies is able to alleviate the preceding concern. The study demonstrates communication and coordination may not only derive from Community principles, but also from soft law instruments based on best practices.
Published Version
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