The great majority of domestic insolvency and corporate law regimes do not address the treatment of corporate groups in specific legislation or at all.

Treatment of corporate groups in insolvency

Existing treatment of corporate groups in insolvency

IMF staff have produced a number of reports on corporate insolvency, bank insolvency and the restructuring of unsustainable sovereign debt, including Orderly and Effective Insolvency Procedures Key Issues (1999) (analysing major policy choices to be addressed in the design of an effective corporate insolvency system).

Insolvency law

(b) Insolvency law

(b) Insolvency law

In its work on the Legislative Guide on Insolvency Law, UNCITRAL recognized the importance of the issues relating to the treatment of corporate groups in insolvency and addressed them in part (Part two, chap. VI, paras.

(e) In the area of insolvency, the UNCITRAL Model Law on Cross Border Insolvency and the UNCITRAL Legislative Guide on Insolvency Law

Assistance to law reform in the area of insolvency law reform includes the Regional Technical Assistance (RETA) 5975 Promoting Regional Cooperation in Insolvency Law Reforms addressing (a) informal workouts, (b) intersection between insolvency law and secured transactions law and (c) cross border insolvency.

The insolvency law should specify that, if a security right is entitled to priority under law other than the insolvency law, that priority continues unimpaired in insolvency proceedings except if, pursuant to the insolvency law, another claim is given priority.

Domestic insolvency law treatment

Proposal by the International Insolvency Institute (III), Committee on Corporate and Professional Responsibilities

UNCITRAL has a proven track record in insolvency law work, developing both the Model Law on Cross Border Insolvency and the Legislative Guide on Insolvency Law in comparatively short periods of time.

(4) The insolvency law should specify that where a security interest is effective and enforceable under law other than the insolvency law, it will be recognized in insolvency proceedings as effective and enforceable.

Note to the Working Group See recommendation I in the recommendations of this Guide on Insolvency The insolvency law should specify that, if a security right is entitled to priority under law other than the insolvency law, that priority continues unimpaired in insolvency proceedings except if, pursuant to the insolvency law, another claim is given priority.

(52) The insolvency law should permit

(88) The insolvency law should specify that notwithstanding that a security interest is effective and enforceable under law other than the insolvency law, it may be subject to the avoidance provisions of insolvency law on the same grounds as other transactions.

(72) The insolvency law should specify that the insolvency representative may decide to continue the performance of a contract of which it is aware where continuation would be beneficial to the insolvency estate. The insolvency law should specify that

(59) The insolvency law should permit the insolvency representative to use and dispose of cash proceeds if

(46) The insolvency law should specify that, on commencement of insolvency proceedings add a, b, c, d, e

The Hague Conference collaborated closely with UNCITRAL in developing the chapter of the UNCITRAL Legislative Guide on Insolvency Law dealing with law applicable in insolvency proceedings.

(ii) Macedonia insolvency law reform (16 17 December 2004)

(n) UNCITRAL Model Law on Cross Border Insolvency (1997)

E. UNCITRAL Model Law on Cross Border Insolvency (1997)

Possible future work in the area of insolvency law

Current activities of international organizations related to Insolvency law

(49) The insolvency law should specify that the measures applicable on commencement of insolvency proceedings remain effective throughout those proceedings until

(152) Where the insolvency law requires court confirmation of an approved plan, the insolvency law should require the court to confirm the plan if the following conditions are satisfied

(f) The possible repercussions for secured transactions and secured creditors in the way in which corporate groups are treated in insolvency.

(62) The insolvency law should permit the insolvency representative to determine the treatment of any assets that are burdensome to the estate.

(35) The insolvency law should specify that the estate should include

59 40. Legislative Guide on Insolvency Law of the United Nations Commission on International Trade Law

See footnote to recommendation 46(b) of the Insolvency Guide, which provides that If law other than the insolvency law permits those security interests to be made effective within certain specified time periods, it is desirable that the insolvency law recognize those periods and permit the interest to be made effective where the commencement of insolvency proceedings occurs before expiry of the specified time period.

INSOL proposes that the United Nations Commission on International Trade Law (UNCITRAL) consider undertaking a project in the area of insolvency law and its effects upon the treatment of corporate groups and related companies when one or more of the members of such a group becomes insolvent.

That consultation might take the form of a multinational colloquium, a forum used to good effect in developing both the Model Law on Cross Border Insolvency and the Legislative Guide on Insolvency Law.

Officer and director responsibilities and liabilities are generally imbedded in corporate and insolvency laws, which often interact with other national laws and policies.

For example, neither the European Council Regulation No. 1346 2000 on Insolvency Proceedings nor the UNCITRAL Model Law on Cross Border Insolvency addresses the issue.

Detailed reports on electronic commerce and insolvency law had also been drawn up.

Such exceptions should be minimal and clearly set forth in the insolvency law.

Such exceptions should be minimal and clearly set forth in the insolvency law.

Since 1992, the Privatisation and Enterprise Reform Unit of the OECD has been involved in a process of developing rules and policies for transition and emerging market governments in the area of legal reform, focusing on privatization, insolvency and corporate law.

It is suggested that, as a first step, an in depth study of different approaches to the treatment of corporate groups in insolvency would provide the means for identifying the issues that should be addressed to deliver predictability and transparency to the treatment of corporate groups in insolvency, as well as possible approaches and options for addressing those issues.

This note includes recommendations taken from the UNCITRAL Legislative Guide on Insolvency Law (the Insolvency Guide), indicated by numbers in parentheses (the numbers reflect the numbers of the Insolvency Guide), and recommendations A K, which are new and therefore additional to the recommendations in the Insolvency Guide.

Recently there has been an increased focus on director and officer responsibilities and liabilities in insolvency and pre insolvency proceedings, fuelled in part by the widely publicized cases of WorldCom, Parmalat and Enron, highlighting alleged corporate fraud and self dealing.