Cross-border insolvency in the EU and multinational corporations group

Abstract

Treatment of a company as separate from the group legal entity raises a number of difficult and complex issues, especially when a company becomes insolvent. While insolvency law was once an issue limited to concerns of national legislators, this is no longer the case, since many companies operate in a number of countries. Therefore, all shortcomings become even more complicated in the field of cross-border insolvency. The complex structure of multinational enterprise group and insolvency proceedings of its mem-bers causes a bunch of problems 1) how to ensure efficient procedural cooperation of insolvency proceedings of group members; 2) whether to extend liability for a subsidiary company’s debts to its parent company; 3) whether to avoid intra-group transactions, etc. Without proper regulation and established practice, a great level of complexity may deter legal certainty and efficiency of proceedings. My research question is whether existing legal measures on cooperation ensure legal certainty in cross-border insolvency in the EU. The legal certainty is a key principle for investments.