Civil Law and Cross-Border Insolvency Asset Recovery in Europe

1. Introduction

Cross-border insolvency asset recovery refers to the legal process by which an insolvency practitioner, liquidator, administrator, trustee, or creditor attempts to identify, preserve, recover, and realise assets located in another country for the benefit of the insolvency estate and creditors.

Typical examples include:

money transferred to a bank account in another European State;

property purchased or held through a foreign subsidiary;

fraudulent transfers before insolvency;

assets transferred to related companies;

receivables owed by foreign customers;

shares, securities, intellectual property or digital assets held abroad;

property subject to a reservation of title;

assets concealed through cross-border transactions;

transactions designed to prefer one creditor over others.

The European system is principally based on Regulation (EU) 2015/848 on insolvency proceedings, together with national insolvency laws, EU private international law and, where appropriate, Regulation (EU) 1215/2012 on jurisdiction and recognition/enforcement of judgments.

The Insolvency Regulation seeks to coordinate proceedings, avoid forum shopping, facilitate recognition of insolvency proceedings and allow recovery actions connected with insolvency to be pursued across Member States. (EUR-Lex)

A key point is that European cross-border insolvency is not governed by one uniform substantive insolvency law. EU law provides the framework for jurisdiction, recognition, applicable law and cooperation, while many substantive questions remain governed by national law.

2. Meaning of Asset Recovery in Insolvency

Asset recovery can involve several different legal mechanisms.

A. Recovery of transferred assets

The debtor may have transferred assets shortly before insolvency.

Example:

A German company transfers €5 million to a related French company shortly before entering insolvency.

The liquidator may seek to challenge the transaction and recover the money.

B. Avoidance or claw-back actions

These may challenge:

fraudulent transactions;

transactions at undervalue;

preferential payments;

transactions detrimental to creditors;

transactions intended to remove assets from the insolvency estate.

C. Recovery of foreign receivables

A debtor may have customers or contractual debtors in another Member State.

The insolvency practitioner may need to:

establish the debt;

obtain judgment if necessary;

obtain recognition/enforcement;

collect the money;

transfer the proceeds into the insolvency estate.

D. Recovery of foreign real estate

Real property creates additional complications because rights in immovable property are strongly connected with the law of the State where the property is situated.

E. Recovery from related companies

Asset recovery may involve:

parent companies;

subsidiaries;

sister companies;

directors;

shareholders;

connected persons.

The insolvency practitioner must distinguish between genuine corporate transactions and transactions that improperly removed assets from the estate.

3. European Legal Framework

A. Regulation (EU) 2015/848

This is the central EU instrument.

It establishes rules concerning:

jurisdiction to open insolvency proceedings;

centre of main interests (COMI);

secondary insolvency proceedings;

applicable law;

recognition of insolvency proceedings;

recognition and enforcement of insolvency judgments;

cooperation between insolvency practitioners;

cooperation between courts;

avoidance actions;

group insolvency proceedings.

The Regulation specifically gives the courts of the Member State where insolvency proceedings are opened jurisdiction over actions directly deriving from insolvency proceedings and closely connected with them, including avoidance actions. (EUR-Lex)

4. Centre of Main Interests — COMI

One of the most important issues in cross-border insolvency is determining the debtor's centre of main interests, commonly called COMI.

Generally:

COMI identifies the place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties.

The location of COMI normally determines where main insolvency proceedings can be opened.

This matters enormously for asset recovery because the main insolvency court will usually have jurisdiction over insolvency-related recovery actions.

5. Main and Secondary Insolvency Proceedings

European insolvency law distinguishes between:

Main proceedings

These are opened in the Member State having jurisdiction based upon the debtor's COMI.

They normally have broader effects across the EU.

Secondary proceedings

These may be opened in another Member State where the debtor has an establishment.

Their effects are generally limited to assets situated in that State.

The Regulation expressly provides for secondary proceedings and permits mechanisms designed to coordinate them with the main proceedings. (EUR-Lex)

Example

A company has:

COMI in Germany;

warehouse and substantial assets in France;

bank accounts in Spain.

Germany may host the main proceedings, while French proceedings may potentially concern assets connected with the French establishment.

The insolvency practitioner therefore has to coordinate asset recovery across all three jurisdictions.

6. Applicable Law — Lex Concursus

A fundamental principle is lex concursus, meaning the law of the State in which the insolvency proceedings are opened.

Under Article 7 of Regulation 2015/848, unless otherwise provided, the law of the State of opening governs the insolvency proceedings and their effects. (EUR-Lex)

It can determine matters such as:

which assets form part of the estate;

powers of the insolvency practitioner;

treatment of creditors;

effects of insolvency;

avoidance rules;

distribution;

ranking of claims;

conditions for challenging transactions.

However, the Regulation contains important exceptions.

7. Why Asset Recovery Is Legally Difficult

Cross-border recovery becomes complicated because several legal systems may simultaneously be relevant.

For example:

A Spanish debtor transfers assets to an Italian company, the money enters a Dutch bank account, the transaction is governed by French law, and insolvency proceedings are opened in Spain.

The court may have to determine:

Which court has jurisdiction?

Which law governs the insolvency?

Which law governs the transaction?

Is the transaction avoidable?

Where should the recovery action be brought?

Will the judgment be recognised?

How will the recovered assets be enforced?

Does another State have rights over the asset?

8. Avoidance Actions

Avoidance actions are among the most important tools for asset recovery.

They attempt to undo transactions that harmed the collective interests of creditors.

Common examples include:

1. Preferential transactions

The debtor pays one creditor shortly before insolvency, improving that creditor's position over others.

2. Transactions at undervalue

An asset worth €10 million is transferred for €2 million.

3. Fraudulent transfers

Assets are transferred to connected parties with the objective of keeping them away from creditors.

4. Security transactions

A debtor grants security shortly before insolvency in circumstances where national law permits the transaction to be challenged.

5. Related-party transactions

Assets are moved between companies in the same corporate group.

9. Jurisdiction for Avoidance Actions

This is particularly important.

Article 6 of Regulation 2015/848 provides that the courts of the Member State where insolvency proceedings have been opened have jurisdiction for actions deriving directly from insolvency proceedings and closely connected with them, including avoidance actions. (EUR-Lex)

This principle was already strongly established under the earlier Insolvency Regulation.

10. Case Law

Case 1 — Seagon v Deko Marty Belgium NV

C-339/07

Court: Court of Justice of the European Union
Subject: Avoidance action and jurisdiction

This is one of the most important cases concerning cross-border insolvency recovery.

A German insolvency administrator brought an action seeking to set aside a transaction against a Belgian company.

The CJEU held that the courts of the Member State in which insolvency proceedings were opened had jurisdiction over an insolvency-based avoidance action against a defendant located in another Member State. (EUR-Lex)

Principle

An avoidance action closely connected with insolvency is not treated simply as an ordinary civil action.

Importance for asset recovery

The case facilitates the recovery of assets transferred across borders because the insolvency court can exercise jurisdiction over the avoidance claim even when the recipient is located in another Member State.

Exam point:
Seagon = insolvency court jurisdiction over cross-border avoidance action.

11. Case 2 — Schmid v Hertel

C-328/12

Court: CJEU
Judgment: 16 January 2014

This case concerned an avoidance action against a person residing in a third country.

The CJEU held that the courts of the Member State where insolvency proceedings were opened could have jurisdiction over an insolvency-based avoidance action even when the defendant was outside the EU. (EUR-Lex)

Importance

The case demonstrates that the European insolvency jurisdiction rules can extend beyond purely intra-EU situations.

However, obtaining a judgment is not the same as enforcing it.

If the defendant or assets are located in a third country, enforcement ultimately depends on the law or treaty framework of that third country.

Principle

Jurisdiction over an insolvency claim and practical enforcement of the resulting judgment are separate questions.

12. Case 3 — Eurofood IFSC Ltd

C-341/04

Court: CJEU, Grand Chamber
Judgment: 2 May 2006

Eurofood is a foundational European insolvency case concerning:

COMI;

recognition;

main insolvency proceedings;

mutual trust;

public policy.

The Court emphasised the importance of objective and ascertainable criteria for determining COMI and the recognition of insolvency proceedings opened by the competent Member State. (InfoCuria)

Importance for asset recovery

Before assets can effectively be recovered cross-border, it is necessary to know which proceeding is the main proceeding.

If competing States attempt to treat themselves as having primary jurisdiction, recovery can become fragmented.

Principle

COMI determines the centre of the main insolvency proceeding, and recognition supports cross-border administration of the estate.

13. Case 4 — Interedil Srl

C-396/09

Court: CJEU
Judgment: 20 October 2011

Interedil concerned:

COMI;

transfer of registered office;

establishment;

international jurisdiction.

The Court addressed the circumstances in which a debtor's registered office and actual centre of administration may point to different jurisdictions. (EUR-Lex)

Importance

A debtor cannot simply manipulate insolvency jurisdiction by moving its registered office shortly before insolvency.

The factual reality of the debtor's administration and the expectations of third parties are important.

Asset-recovery significance

If a company deliberately relocates its registered office to obtain a more favourable insolvency regime, this can affect:

the identity of the main insolvency court;

applicable insolvency law;

recovery proceedings;

creditor protection.

Exam point:
Interedil = COMI + establishment + jurisdiction.

14. Case 5 — German Graphics Graphische Maschinen GmbH

C-292/08

Court: CJEU
Judgment: 10 September 2009

German Graphics concerned the relationship between insolvency proceedings and property rights involving a reservation of title.

The case illustrates an important limitation:

Not every dispute involving an insolvent debtor automatically becomes an insolvency matter.

The Court examined whether the dispute was sufficiently connected with the insolvency proceedings or instead concerned an independent property right. (EUR-Lex)

Importance for asset recovery

Suppose a German seller retains ownership of machinery supplied to a Dutch company that later becomes insolvent.

The seller may argue:

"The machinery belongs to me and therefore should not be part of the insolvency estate."

This is different from an ordinary avoidance action.

Principle

The distinction between insolvency claims and independent proprietary claims is crucial in determining jurisdiction and applicable law.

15. Case 6 — F-Tex SIA v Lietuvos-Anglijos UAB “Jadecloud-Vilma”

C-213/10

Court: CJEU
Judgment: 19 April 2012

F-Tex concerned a liquidator's assigned right to pursue an avoidance claim.

The Court considered whether the claim remained sufficiently connected with insolvency proceedings or had become an ordinary civil/commercial action.

The CJEU treated the characterization of the action as central to deciding which jurisdictional regime applied. (InfoCuria)

Importance

An insolvency practitioner may sometimes assign or transfer a claim.

That creates a critical question:

Does the claim remain an insolvency action, or has it become an ordinary civil claim?

The answer can change:

jurisdiction;

applicable procedural rules;

recognition;

enforcement;

available remedies.

Principle

The legal nature of the claim, rather than merely the identity of the claimant, determines the applicable jurisdictional framework.

16. Case 7 — Vinyls Italia SpA v Mediterranea di Navigazione SpA

C-54/16

Court: CJEU
Judgment: 8 June 2017

Vinyls Italia concerned an act potentially detrimental to creditors and the interaction between the insolvency law of the opening State and another Member State's law.

The case examined the protection available where an act is governed by the law of another Member State and that law does not permit the transaction to be challenged in the relevant circumstances. (EUR-Lex)

Importance

This illustrates the tension between:

collective creditor protection

and

protection of legitimate commercial expectations.

Cross-border insolvency cannot simply disregard the legal certainty surrounding transactions carried out under another Member State's law.

Principle

Asset recovery is subject to important exceptions protecting transactions governed by another legal system.

17. Case 8 — German Graphics and the Protection of Proprietary Rights

German Graphics is particularly useful for demonstrating that asset recovery does not automatically mean clawing back property for the estate.

A creditor may have a genuine proprietary right that survives the debtor's insolvency.

Examples include:

reservation of title;

ownership rights;

security rights;

rights over registered assets.

Therefore, the insolvency practitioner must first establish:

Does the asset actually belong to the insolvency estate?

Only then can recovery for the collective benefit of creditors be considered.

18. Case 9 — Eurofood and Mutual Recognition

Eurofood also establishes an important procedural foundation for asset recovery.

Once properly opened insolvency proceedings are recognised, their effects generally extend across Member States without each State conducting a completely fresh examination of the underlying insolvency decision.

The current Regulation maintains this principle of recognition and provides that judgments concerning the conduct and closure of insolvency proceedings, as well as closely connected judgments, can be recognised and enforced under the applicable EU framework. (EUR-Lex)

Importance

Without recognition, a liquidator could face separate litigation in every jurisdiction where assets are located.

19. Recognition and Enforcement of Insolvency Judgments

Regulation 2015/848 provides a system for recognition of insolvency proceedings and related judgments.

Article 19 establishes recognition of qualifying insolvency-opening judgments in other Member States.

Article 32 deals with recognition and enforceability of other judgments connected with insolvency proceedings. (EUR-Lex)

Therefore:

Opening of insolvency proceedings → recognition → recovery action → judgment → enforcement → asset realisation.

20. Public Policy Exception

Recognition is not absolutely unlimited.

Article 33 permits refusal where recognition or enforcement would be manifestly contrary to public policy, particularly fundamental principles or constitutional rights.

This is intended to be an exceptional safeguard rather than an ordinary opportunity to reconsider the foreign insolvency proceeding. (EUR-Lex)

21. Asset Location and Immovable Property

Real estate requires special attention.

For example:

A French company becomes insolvent in France but owns commercial property in Italy.

The insolvency practitioner must consider:

Italian property law;

registration requirements;

mortgages;

security interests;

possession;

local enforcement procedures;

rights of secured creditors;

insolvency effects under EU law.

The Insolvency Regulation contains specific exceptions relating to rights in rem and immovable property.

22. Bank Accounts and Cash

Cross-border bank accounts are another major recovery target.

The insolvency practitioner may need to:

identify the account;

establish ownership;

establish the account balance;

determine whether another person has rights over the money;

obtain freezing or preservation measures where appropriate;

obtain payment into the insolvency estate.

The analysis may involve both insolvency law and ordinary civil-procedure/enforcement mechanisms.

23. Shares and Securities

Recovery becomes more complicated when assets consist of:

shares;

bonds;

securities;

investment accounts;

derivatives;

crypto-assets.

Questions include:

Where is the asset legally situated?

Which register controls ownership?

Who is the beneficial owner?

Is there a security interest?

Does the asset belong to the debtor or another entity?

Which law governs the proprietary right?

24. Fraudulent Asset Transfers

A common cross-border insolvency scenario is:

Debtor → Related company → Foreign jurisdiction → Asset sale

For example:

Company A faces financial difficulties.

It transfers valuable intellectual property to Company B.

Company B is incorporated in another Member State.

Company A enters insolvency.

Liquidator discovers the transfer.

Liquidator brings an avoidance action.

Court considers whether transaction harmed creditors.

Transaction may be set aside under applicable law.

Asset or proceeds return to the estate.

This is the classic asset-recovery function of avoidance proceedings.

25. Fraud and Concealment

Cross-border asset recovery may involve intentional concealment.

Examples:

nominee companies;

offshore accounts;

false invoices;

related-party loans;

circular transactions;

sham sales;

undervalue transfers;

fictitious consultancy agreements;

transfers to directors or shareholders.

The insolvency practitioner normally needs documentary and financial evidence showing:

timing;

ownership;

consideration;

relationship between parties;

financial condition of debtor;

purpose/effect of transaction;

creditor prejudice.

26. Burden of Proof

The burden depends substantially on national law.

Typical evidence includes:

bank statements;

accounting records;

corporate registers;

contracts;

invoices;

emails;

board resolutions;

shareholder records;

valuation reports;

tax documents;

audit reports;

digital records;

expert reports.

Cross-border proceedings also require careful handling of:

translation;

authentication;

electronic evidence;

foreign-language documents;

data protection;

evidence located in another State.

27. Related-Party Transactions

Courts generally scrutinise transactions involving:

directors;

controlling shareholders;

family members;

parent companies;

subsidiaries;

sister companies.

The reason is practical:

Related parties may have superior knowledge of the debtor's financial condition.

A transaction shortly before insolvency can therefore become particularly important.

But relationship alone does not establish illegality. The legal requirements of the applicable avoidance regime must still be satisfied.

28. Insolvency Practitioner's Powers

The insolvency practitioner may need to:

identify assets;

take control of assets;

investigate transactions;

communicate with foreign practitioners;

commence litigation;

bring avoidance claims;

seek interim measures;

recover receivables;

sell property;

negotiate settlements;

distribute recovered proceeds.

Regulation 2015/848 is designed to facilitate cooperation between courts and insolvency practitioners in cross-border cases.

29. Secondary Proceedings and Asset Recovery

Secondary proceedings can create both protection and complexity.

Suppose:

main proceedings are in Germany;

debtor has an establishment in France;

major French assets are located there.

French secondary proceedings may protect local interests, but they can also complicate centralised recovery.

The Regulation therefore contains mechanisms allowing the main insolvency practitioner to avoid secondary proceedings in appropriate circumstances through an undertaking concerning distribution and creditor priorities. (EUR-Lex)

30. Asset Recovery and Secured Creditors

Recovery does not necessarily mean that all recovered assets are distributed equally.

The insolvency estate may contain assets subject to:

mortgages;

pledges;

liens;

retention of title;

financial collateral;

other rights in rem.

The priority of secured creditors can therefore significantly affect the amount ultimately available to unsecured creditors.

31. Contractual Asset Recovery

Not every cross-border recovery claim is an insolvency avoidance action.

Consider:

A German debtor has an unpaid €3 million receivable against an Italian customer.

The claim may simply be a contractual receivable.

The practitioner may have to use ordinary civil/commercial jurisdiction rules rather than the special insolvency jurisdiction.

This distinction was important in cases such as F-Tex.

32. Insolvency Law vs Ordinary Civil Law

A useful distinction is:

33. Choice of Law

Cross-border asset recovery requires careful examination of several laws.

Law of insolvency proceedings

Usually:

lex concursus

Law governing contract

Potentially:

Rome I Regulation

Law governing non-contractual obligations

Potentially:

Rome II Regulation

Law governing property

Often determined by specific property-law rules and the location/nature of the asset.

Procedural law

Generally connected to the court hearing the matter.

Thus, one asset-recovery case may involve several different legal systems.

34. Jurisdictional Problem

The first question should normally be:

What is the legal nature of the claim?

If it is:

closely connected with insolvency → Insolvency Regulation

If it is:

ordinary contractual/civil claim → potentially Brussels I bis

If it is:

property-related → special property jurisdictional considerations

This classification can determine the entire litigation strategy.

35. Interim Measures

Asset recovery can fail if assets disappear before judgment.

Therefore, insolvency practitioners may consider:

freezing orders;

preservation orders;

attachment;

injunctions;

registration restrictions;

prohibition on disposal;

bank-account preservation.

The appropriate mechanism depends on the Member State and the nature of the proceedings.

36. Recognition of Foreign Insolvency Practitioners

Recognition of the insolvency proceeding is important because the practitioner may need to demonstrate authority to act abroad.

The practitioner may need to establish:

appointment;

scope of powers;

authority to litigate;

authority to recover assets;

authority to sell property;

authority to negotiate.

The European framework seeks to avoid requiring the practitioner to commence an entirely new insolvency process in every Member State.

37. Cross-Border Corporate Groups

Asset recovery becomes particularly difficult in corporate groups.

Example:

Parent Company — Germany
↓
Subsidiary — France
↓
Subsidiary — Italy
↓
Assets — Spain

The insolvency of the parent does not automatically make the subsidiaries' assets part of the parent's insolvency estate.

The practitioner must establish:

ownership;

separate legal personality;

intercompany transactions;

guarantees;

loans;

fraudulent transfers;

group liabilities;

applicable insolvency proceedings.

EU law contains special provisions concerning coordination of insolvency proceedings involving members of corporate groups.

38. Asset Tracing

Effective recovery normally requires asset tracing.

The practitioner may construct a transaction chain:

Original asset → transfer → intermediary → foreign company → bank account → final asset

The legal objective is to determine:

where the asset went;

who received it;

whether consideration was paid;

whether the transfer was valid;

whether it can be challenged;

whether the asset or its proceeds can be recovered.

39. Digital Assets

Modern cross-border insolvency increasingly raises issues involving:

cryptocurrency;

digital wallets;

tokens;

digital securities;

domain names;

cloud-based intellectual property;

online payment accounts.

The fundamental questions remain similar:

ownership;

location;

control;

valuation;

tracing;

applicable law;

enforcement.

However, digital assets may make traditional concepts of asset location much more difficult.

40. Limitation Periods

Limitation is extremely important.

An insolvency practitioner may discover a transaction years after it occurred.

The relevant period may depend upon:

national insolvency law;

type of avoidance action;

contractual law;

applicable conflict-of-law rules;

date of transaction;

date of insolvency;

knowledge of creditors or practitioner.

Therefore, limitation must be checked before filing the recovery action.

41. Damages and Restitution

A successful asset-recovery action may result in:

return of property;

repayment of money;

restitution;

interest;

damages;

cancellation of security;

reversal of preferential treatment.

The exact remedy depends upon the legal basis of the claim and applicable national law.

42. Defences to Asset Recovery

The recipient of the asset may argue:

Good faith

The recipient did not know about the debtor's financial difficulties.

Ordinary commercial transaction

The transaction occurred in the normal course of business.

Adequate consideration

The debtor received fair market value.

Applicable foreign law

The transaction is governed by another Member State's law and cannot be challenged under that law.

Property ownership

The asset never belonged to the debtor.

Limitation

The recovery action was filed too late.

Lack of jurisdiction

The claimant brought the action in the wrong court.

Vinyls Italia is particularly useful for understanding the interaction between insolvency avoidance rules and another Member State's applicable law. (EUR-Lex)

43. Importance of Seagon and Schmid Together

These two cases can be remembered together:

Seagon

Cross-border avoidance action against a defendant in another EU Member State.

Schmid

Cross-border avoidance action against a defendant in a third country.

Together they demonstrate the broad jurisdictional significance of insolvency-related avoidance claims. (EUR-Lex)

44. Important Principles from the Case Law

45. Practical Cross-Border Recovery Procedure

A typical recovery strategy can be represented as:

Step 1 — Open/identify insolvency proceeding

↓

Step 2 — Determine COMI

↓

Step 3 — Identify all assets

↓

Step 4 — Trace cross-border transfers

↓

Step 5 — Classify each asset

estate asset;

third-party property;

secured asset;

contractual receivable;

disputed asset.

↓

Step 6 — Classify each claim

avoidance;

contractual;

tort;

proprietary;

enforcement.

↓

Step 7 — Determine jurisdiction

↓

Step 8 — Determine applicable law

↓

Step 9 — Seek preservation measures

↓

Step 10 — Commence recovery litigation

↓

Step 11 — Obtain recognition/enforcement

↓

Step 12 — Recover and realise asset

↓

Step 13 — Distribute proceeds according to applicable priority rules

46. Hypothetical Example

Assume:

Company A, incorporated and managed principally in France, becomes insolvent.

Six months before insolvency:

it transfers a factory worth €20 million to a related Belgian company;

the consideration is only €5 million;

the Belgian company subsequently mortgages the factory;

€5 million is transferred to a Luxembourg bank account;

the factory is located in Belgium.

Legal questions

1. Where are main insolvency proceedings?

The first issue is COMI.

If France is the COMI, French main insolvency proceedings may be opened.

2. Is the factory part of the estate?

The practitioner must investigate the transfer.

3. Was the transfer at undervalue?

If so, French insolvency law may potentially provide an avoidance mechanism, subject to applicable exceptions.

4. Where can the avoidance action be brought?

Under the principle established by Seagon, the insolvency court can have jurisdiction over a closely connected avoidance action involving a foreign defendant.

5. What about Belgian property law?

Because the factory is in Belgium, Belgian property rules may remain important.

6. What about the mortgage?

The practitioner must examine whether the mortgage is valid and what priority rights it creates.

7. What about the Luxembourg money?

A separate tracing and recovery process may be required.

Result

The recovery strategy may therefore involve:

France + Belgium + Luxembourg

while still being coordinated through the main insolvency proceeding.

47. Main Challenges in Cross-Border Asset Recovery

1. Jurisdictional fragmentation

Different courts may become involved.

2. Different national insolvency laws

EU coordination does not completely harmonise substantive insolvency law.

3. Asset concealment

Assets may be transferred through several jurisdictions.

4. Corporate structures

Subsidiaries may legally own assets separately.

5. Security interests

Secured creditors may have priority.

6. Property rights

Ownership disputes may fall outside the ordinary insolvency framework.

7. Limitation

Recovery actions may become time-barred.

8. Evidence

Important evidence may be located abroad.

9. Enforcement

Obtaining judgment and actually recovering money are different stages.

10. Third-country assets

EU recognition mechanisms do not automatically control jurisdictions outside the EU.

48. Relationship Between Insolvency and Private International Law

European cross-border insolvency operates at the intersection of:

insolvency law;

civil procedure;

private international law;

property law;

contract law;

company law;

secured transactions law;

enforcement law.

This is why classification is so important.

A dispute described simply as an “asset recovery claim” may legally be:

an avoidance action;

an ownership action;

a contractual claim;

a tort claim;

a security enforcement claim;

a restitution claim.

Each can lead to a different jurisdictional and applicable-law analysis.

49. Six Most Important Cases for Examination

If only six cases have to be remembered, use:

Eurofood IFSC Ltd — C-341/04
→ COMI and recognition.

Seagon v Deko Marty — C-339/07
→ jurisdiction over avoidance actions.

German Graphics — C-292/08
→ insolvency claims versus proprietary rights.

Interedil — C-396/09
→ COMI and establishment.

Schmid v Hertel — C-328/12
→ avoidance action involving third-country defendant.

Vinyls Italia — C-54/16
→ applicable law and protection of cross-border transactions.

A seventh useful case is F-Tex, C-213/10, especially for distinguishing insolvency-related claims from ordinary civil/commercial claims.

50. Short Exam Answer

Cross-border insolvency asset recovery in Europe concerns the recovery of assets located outside the State where the main insolvency proceedings are opened. Regulation (EU) 2015/848 provides the principal framework concerning jurisdiction, COMI, recognition, applicable law, secondary proceedings, cooperation and insolvency-related judgments. Article 6 gives the insolvency courts jurisdiction over actions directly deriving from insolvency proceedings and closely connected with them, particularly avoidance actions. (EUR-Lex)

The CJEU has developed important principles through Eurofood, Seagon, German Graphics, Interedil, F-Tex, Schmid and Vinyls Italia. These cases address COMI, recognition, avoidance actions, proprietary rights, jurisdiction and the protection of transactions governed by another Member State's law. The principal objective is to enable efficient recovery while protecting legitimate commercial expectations and respecting different national insolvency and property laws.

51. Ultra-Short Revision Formula

Cross-Border Insolvency Asset Recovery =

COMI + Main Proceedings + Lex Concursus + Asset Tracing + Avoidance + Jurisdiction + Recognition + Enforcement + Property Rights + Creditor Priority

Six key case names:

Eurofood → Seagon → German Graphics → Interedil → Schmid → Vinyls Italia

Core principle:

The European system seeks to centralise and coordinate insolvency recovery while recognising that asset ownership, secured rights, contractual obligations and certain transaction-specific issues may remain governed by other national laws. (EUR-Lex)