Principles of Cross-border Insolvency Law

• Applicant: Professor Dr. Reinhard Bork
• Subject Area: Private Law
• Term: from 2015 to 2018
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 280471128

Notwithstanding the revision of the European Insolvency Regulation (EIR) currently being undertaken the long term goal of the EU is the harmonisation of national insolvency laws. Cross-border insolvency law has already largely been unified by the EIR but does still need reforms. Harmonisation of the law can only succeed if one has a clear understanding of the common principles upon which national and international rules are based. This task has so far not been performed. This is true even though there are numerous treatises and monographs dealing with the principles of (international) insolvency law. These texts almost always list a series of topics that the law is supposed to address, but do not elaborate on the underlying principles. The effects of individual principles (such as the principle of equal treatment of creditors - pari passu rule) have been relatively well researched. What has been lacking is comprehensive research on the foundational principles of the law.The research project proposed here, for which my Faculty has granted a sabbatical year, is designed to make up this deficit, at least in relation to cross-border insolvency law. (If the project is successfully completed, it will be expanded to include national insolvency laws. That, however, remains for a further application to discuss.) In undertaking this task, international legislation such as the EIR, model laws such as the UNCITRAL Model Law or that of the American Law Institute, and national norms of cross-border insolvency law, in particular those operating in Germany, England, and the USA, will be taken into account. Using these different norms, the project will evaluate the current laws as mirrored in legislative materials, court decisions and literature, elaborate their common basic principles, clarify the principles' relationship with each other, examine their scope of application and, in particular, investigate their potential for harmonisation.The carrying out of this research project will require stays in England (12 months, starting 1 August 2015) and the USA (2 months). England is a desirable location because (1) as a member state of the EU, the United Kingdom is executing the EIR, (2) in relation to all other states, it has also adopted the UNCITRAL Model Law, and (3) in relation to the Commonwealth countries, it answers important questions on the basis of domestic insolvency law (sec. 426 Insolvency Act 1986). This last factor allows for the added advantag of permitting comparison of both the different laws applicable in England and between English speaking states. The time in the USA will be used to complete the evaluation of American sources. The results will be published as a book and in English in order to make them internationally visible and accessible.

• DFG Programme: Research Grants