The Rise and Fall of Regulatory Competition in Corporate Insolvency Law in the European Union

Horst Eidenmüller

doi:10.1007/s40804-019-00160-0

Abstract

In this article, I discuss the rise and fall of regulatory competition in corporate insolvency law in the European Union. The rise is closely associated with the European Insolvency Regulation (EIR, 2002), and it is well documented. The UK has emerged as the ‘market leader’, especially for corporate restructurings. The fall is about to happen, triggered by a combination of factors: the recasting of the EIR (2017), the European Restructuring Directive (ERD, 2019) and Brexit (2019). The UK will lose its dominant market position. I present evidence to support this hypothesis.

Highlights

Insolvency laws in general and corporate insolvency/restructuring regimes in particular are economically important
The rise is closely associated with the European Insolvency Regulation (EIR, 2002), and it is well documented
This article discusses the rise of regulatory competition in corporate insolvency law in the European Union (EU), and how the UK came to be the preferred European venue for corporate restructurings

Summary

Introduction

Insolvency laws in general and corporate insolvency/restructuring regimes in particular are economically important. It was designed to eliminate forum shopping (Recital 4) and to harmonise Member States’ jurisdiction and conflicts rules for international insolvencies. In practice, it did not achieve this end. This article discusses the rise of regulatory competition in corporate insolvency law in the EU, and how the UK came to be the preferred European venue for corporate restructurings. This article investigates how these events will affect regulatory competition in corporate insolvency law in the EU. It hypothesises that this competition will be weaker in the future and that the UK will lose its dominant market position.

Regulatory Competition in Corporate Insolvency Law

The Evolution of Corporate Insolvency Law and Practice in the EU

Regulatory Competition Under the ‘Original’ European Insolvency

Conclusion