In order to increase the effectiveness of cross-border insolvency proceedings, the original Council regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings is replaced by new Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) which will apply from 26 June 2017.
Among the many changes included in the recast regulation, this part will deal with so-called “forum shopping”. This refers to fraudulent or abusive behaviour where a party to insolvency proceedings (creditor or debtor) chooses to transfer judicial proceedings from one Member State to another, seeking to obtain a more favourable legal position to the detriment of the other parties. In connection with this phenomenon, the definition of the centre of main interests (“COMI”) of the debtor has also been recast. The COMI is the place of the debtor’s/ entrepreneur’s registered office or place of business, but only if the debtor has not relocated it there within three months or less before the petition for insolvency. In the case of an individual not exercising an independent business or professional activity, the period is six months.
The court where the insolvency petition is filed will have a statutory obligation to verify its jurisdiction with regard to the COMI. Debtor and creditor will be able to file for remedies against a decision to open insolvency proceedings.