“A panel session on the latest developments from the crypto sector chaired by Henry Page (Mercer & Hole) featuring renowned crypto experts Charles Kerrigan (CMS), Julia Marshall (Alvarez & Marsal Europe) and Allister Manson (Opus Business Advisory Group, UK) took place. Cryptoassets span a wide and rapidly evolving range of digital instruments, although the market continues to be dominated by unbacked cryptocurrencies such as Bitcoin. They have the potential to bring benefits to financial services and the wider economy but also pose significant risks, given their significant price volatility and associated risk of losses. Cryptoassets are increasingly being used by criminals in scams, fraud and money laundering and therefore will crop up in the growing number of company failures and personal bankruptcies in the near future. This is ever more prevalent with a number of recent high-profile crypto insolvencies including Three Arrows Capital, Celsius Network and FTX. Effective regulation of cryptoassets should help to foster innovation and maximise any potential benefits of cryptoasset technologies, while also mitigating risks. Insolvency practitioners need to be on the front foot quickly to identify and realise such cryptoassets; failure to do so could materially impact the return to creditors and expose an officeholder to a claim by creditors.”
“Before 2021, companies from all over the world have frequently and routinely made use of English insolvency and restructuring laws to deal with their financial troubles. For companies in EU Member States, access to English law company voluntary arrangements or schemes of arrangement was predictable and recognition at home was secured under applicable EU Regulations. As EU law ceased to apply in 2021, the question arose whether this disruption and the resulting legal uncertainty would effectively limit the use of English procedures by EU-based companies.
To answer this question, a panel session titled “Do you recognise me?” on recognition of UK and EU Member States cross-border insolvency proceedings in the Brexit aftermath took place, led by Chris Laughton (Mercer & Hole, UK) who is also INSOL Europe Honorary Officer in recognition of his outstanding contribution to the work of INSOL Europe as President in 2010 – 2011 and Treasurer from 2015 to 2020. This panel session focused attention on INSOL Europe experts from different types of mainland jurisdictions including a country that has a form of the exequatur procedure (Italy with Giorgio Corno of Studio Corno Avvocati who is also INSOL Europe Deputy president), a country that has adopted the UNCITRAL Model Law on Insolvency (Greece with Alexander Metallinos of POTAMITISVEKRIS) and a country that has provisions within its own private international law for companies in third countries, which look at where the company’s centre of main interests is, even though the EIR Recast does not apply, to grant recognition (Germany with Andrea Metz of Barckhaus).
Chris reminded the INSOL Europe/ LexisPSL 2022 Joint Guide on “How EU Member States recognise insolvency and restructuring proceedings of a third country” as a useful tool for all professionals interested in cross-border restructuring and insolvency and then covered the recognition of continental insolvency procedures/plans into UK and.
If the recognition of UK Cross-Border insolvency in the EU in the Brexit aftermath is still difficult, Chris highlighted the “Study on the issue of abusive forum shopping in insolvency proceedings” commissioned by the European Commission’s DG JUST. Indeed, the study provides an assessment of the UK schemes of arrangements and restructuring plans and possible mechanisms for their cross-border circulation in the EU and concludes that Court judgments or orders confirming (or sanctioning) a UK scheme of arrangement may be entitled to EU wide recognition under the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters where also the EU is considering accession.
Chris also mentioned the study titled “ensuring Efficient Cooperation with the UK in civil law matters” commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs that analyses the implications of Brexit in relation to the profile of judicial cooperation in civil matters. The study examines the existing legal framework in order to identify the areas of law in respect of which there is a gap in the relationship between the EU and the UK and the consequences of the UK’s failure to accede to the 2007 Lugano Convention. According to the study, the conclusion of new treaties between the EU and the UK should be pursued in relation to those areas where there is a regulatory gap. As regards the field of judicial cooperation in insolvency proceedings, the non-application of the regulations in respect of the UK will indeed lead to the possibility of parallel proceedings taking place, with the risk of conflicting decisions regarding the interests of creditors. In addition, there will be obstacles inherent in the circulation of judgments. According to the study, it would also be important to reintroduce forms of coordination between the different proceedings opened in different states, in order to facilitate the satisfaction of creditors and, ultimately, the same interest of the person declared insolvent in a speedy closure of bankruptcy proceedings and an efficient liquidation of assets, not to mention the possibility of easier access to debt restructuring measures or composition”