Key cross-border guidelines for insolvency or restructuring cases


Published by a ³ÉÈËÓ°Òô Restructuring & Insolvency expert
Practice notes

Key cross-border guidelines for insolvency or restructuring cases


Published by a ³ÉÈËÓ°Òô Restructuring & Insolvency expert

Practice notes
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Introduction

In addition to the formal provisions of the uncitral model law on insolvency (enacted in England by the Cross-Border Insolvency Regulations 2006 (CBIR 2006), SI 2006/1030) (see Practice Note: UNCITRAL Model Laws—overview), and the Regulation (EU) 2015/848 (OJ L141 5.6.2015 p 19), recast regulation on insolvency [EU Recast Regulation on Insolvency]) which applies between Member States (see: EU Recast Regulation on Insolvency (Member State to Member State)—overview), there are various other guidelines which although having no formal legal status, are sometimes voluntarily chosen by parties to assist in cross-border restructurings and insolvencies including:

  1. •

    INSOL International (International Association of Restructuring, Insolvency & Bankruptcy Professionals): Statement of Principles for a global approach to multi-creditor workouts II, 2017 (the INSOL principles)

  2. •

    INSOL Europe Turnaround Wing Guidelines for Restructuring and Turn Around Professionals (the INSOL TW Guidelines)

  3. •

    ALI (American Law Institute) Principles of cooperation in transnational insolvency cases among the members of the North American Free Trade Agreement (NAFTA), 2001 (the ALI NAFTA Principles)

  4. •

    ALI/III (International Insolvency Institute) Guidelines applicable to court-to-court communications

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Jurisdiction(s):
United Kingdom
Key definition:
Insolvency definition
What does Insolvency mean?

This can be defined by two alternative tests (Insolvency Act 1986, s 123):

• cash flow test: a company is solvent if it can pay its debts as they fall due, no matter what the state of its balance sheet (Re Patrick & Lyon Ltd [1933] Ch 786);

• balance sheet test: a company which can pay its debts as they fall due may be insolvent if, according to its balance sheet, liabilities (including contingent liabilities) exceed assets.

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