Restructuring groups of companies under the European Insolvency regulation (recast)

Woord vooraf V
List of often used abbreviations and references XIII

Chapter 1 Introduction 1
1.1 Introductory remarks 1
1.2 Aim, question(s) and method of research 3

Chapter 2 Description of cross-border group insolvency challenges 9
2.1 Groups of companies: economically integrated, but legally separated 9
2.2 The entity-by-entity approach to group insolvencies 15
2.3 Fragmentation may hamper value maximization 21
2.4 Practical efforts to centralize proceedings under the Original EIR 30

Chapter 3 Defi ning groups of companies under the Insolvency Regulation (recast) – on the scope of EU group insolvency law 39
3.1 Groups of companies and their specifi cs in insolvency 39
3.2 Group structures in all shapes and sizes 42
3.2.1 From big to small and intricate to simple 42
3.2.2 Subordination groups 42
3.2.3 Heterarchical groups 43
3.2.4 Integration and centralization 45
3.3 The boundaries of Chapter V’s application 47
3.3.1 The Definition of groups of companies 47
3.3.1.1 The definition as a starting point for determining Chapter V’s scope 47
3.3.1.2 Control as primary defining concept – but what is it? 49
3.3.1.3 The presumption in case of consolidated financial statements 57
3.3.1.4 A group of companies consists of ‘undertakings’ 61
3.3.1.5 A broad and fl exible approach to defi ning groups 63
3.3.2 Further limitations to Chapter V’s scope 64
3.3.2.1 Multiple proceedings regarding multiple debtors in multiple Member States 64
3.3.2.2 Groups with non-Member State undertakings 66
3.4 Peculiarities regarding heterarchical groups 70
3.5 Concluding: a goal-oriented approach towards defi ning groups of companies 73

Chapter 4 One for all, and all for one? On cross-border CoCo in group insolvencies under the Recast EIR and the existence of an ‘overriding group interest’ 75
4.1 Introduction 75
4.2 Trying to balance the group companies’ legal separateness and value maximization 77
4.3 Chapter V prescribes communication, cooperation and coordination 83
4.4 Efficiency within the context of the Recast EIR 85
4.4.1 Chapter V in pursuit of efficiency… 85
4.4.2 but how should efficiency be measured within a group context? 89
4.4.3 Distribution of the surplus value 94
4.5 The practical implications of the enhanced Kaldor-Hicks standard in Chapter V’s context 95
4.6 Conclusion 98

Chapter 5 Group concerns – Communication and cooperation between practitioners under the European Insolvency Regulation 99
5.1 Introduction 99
5.2 Chapter V and its Main Protagonist: Who is the ‘Insolvency Practitioner’? 105
5.3 Obligation to engage in CoCo – What Can and Should Insolvency Practitioners Do? 113
5.3.1 General remarks 113
5.3.2 The limitations to the CoCo Provisions 115
5.3.2.1 Requirement 1: Appropriateness to Facilitate Effective Administration 118
5.3.2.2 Requirement 2: Not Incompatible with the Rules Applicable to the Proceedings 123
5.3.2.3 Requirement 3: Not Entailing any Conflict of Interest 126
5.3.3 CoCo between Insolvency Practitioners 128
5.3.3.1 Sharing of information 128
5.3.3.2 Coordinating the administration and supervision 135
5.3.3.3 Coordinating the restructuring 138
5.3.3.4 The Recast EIR’s vehicles for institutionalizing IP-to-IP CoCo 142
5.3.4 CoCo between Insolvency practitioners and courts 148
5.3.5 CoCo between insolvency practitioners and the coordinator 152
5.3.6 Insolvency practitioners’ instruments to influence other group members’ proceedings 154
5.3.6.1 General remarks 154
5.3.6.2 The insolvency practitioners’ right to be heard in other group members’ proceedings 156
5.3.6.3 The right to request a stay of realization measures 161
5.3.7 CoCo Costs – Who is to Bear? 171
5.3.8 But, what if CoCo is denied? 175
5.4 An Impressive Set, But Does it Allow for More Efficient Group Restructurings? 179
5.4.1 A Solution for a Traditional Problem? 179
5.4.2 But With New Scopes, Come New Problems 187
5.4.3 Improvements to the Coco Provisions Themselves? 189
5.4.3.1 Interpretation is Key 189
5.4.3.2 A Broader Stay 190
5.4.3.3 A Coherent System for Enforcement and Sanctioning 192
5.5 Conclusion 194

Chapter 6 Group coordination proceedings under the Recast EIR in practice 197
6.1 Introduction 197
6.2 Coordination in a group insolvency context 200
6.2.1 Why would one coordinate? 200
6.2.2 An overview of the GCP 203
6.2.3 A coordinated group restructuring under the Recast EIR absent a GCP 210
6.2.4 The German Koordinationsverfahren 214
6.2.5 The Model Law on Groups 219
6.3 The benefits of a Group Coordination Proceeding 227
6.4 But, why has it not been applied, then? 232
6.5 Potential for improvements to the GCP? 239
6.6 Conclusion 244

Chapter 7 O Captain(s)! My Captain(s)! – Why and how courts should start appointing groupwide insolvency practitioners under the Recast EIR 247
7.1 Introduction 247
7.2 Coordinated group insolvencies and the Recast EIR 250
7.2.1 Entity-by-Entity approach has pros, but also cons 250
7.2.2 The EU’s group insolvency approach is lacking in fire power 254
7.3 Coordinated appointments as a solution to group insolvency challenges 258
7.3.1 Appointing a group insolvency practitioner is already possible under the Recast EIR 258
7.3.2 Usefulness of Group Insolvency Practitioners is recognized internationally – and for good reasons 262
7.3.3 Coordinated appointments are not all sunshine and roses 266
7.4 The appointment of a group insolvency practitioner under Article 57 Recast EIR 272
7.4.1 Introductory remarks 272
7.4.2 Coordinated appointment must be appropriate tofacilitate effective administration 274
7.4.3 Coordinated appointment must be compatible with the applicable rules 281
7.4.4 Coordinated appointment cannot entail any conflict of interest 285
7.4.5 Various other (potentially) relevant factors for coordinated appointments 290
7.4.6 Towards more creative coordinated appointments under the Recast EIR 293
7.5 Room for Improvement 296
7.6 Conclusion 301

Chapter 8 Concluding remarks and conclusion 303
8.1 Introduction 303
8.2 Subquestion 1 – Defi ning ‘Groups of companies’ 303
8.3 Subquestion 2 – Particular Challenges to Cross-Border Group Restructurings 306
8.4 Subquestion 3 – Goals Underlying Chapter V and the in Interaction 308
8.5 Subquestion 4 – Instruments for Group Restructurings in Chapter V, the Gesetz and the Model Law on Groups 309
8.5.1 Introduction of the Scale of Five Ones 309
8.5.2 Cooperation and Communication (Step 1 on Scale mof Five Ones) 311
8.5.3 Non-Intrusive Coordination Proceedings (Also Step 1 on Scale of Five Ones) 313
8.5.4 Group Insolvency Practitioners (Step 2 on Scale of Five Ones) 315
8.5.5 Centralization Through Single Courts? (Step 3 on Scale of Five Ones) 316
8.5.6 Procedural and Substantive Consolidation (Steps 4 and 5 on Scale of Five Ones) 325
8.6 Subquestion 5 – Does Chapter V offer Effi cient Solutions for Group Restructurings, that Respect Legal Separateness? 329
8.7 Subquestion 6 – Which Other Conceivable Instruments Would Solve Cross-Border Group Restructuring Challenges? 336
8.7.1 Introductory Remarks 336
8.7.2 Appointing a Group Insolvency Practitioner? 338
8.7.3 Centralization of Group Insolvencies Before a Single Court? 340
8.7.4 Procedural Consolidation? 344
8.7.5 Other Recommendations? 345
8.8 Conclusion 346

Samenvatting 349
Curriculum vitae 359