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Private International Law Answers to the Insolvency of Cross Borders Groups: Comparative Analysis of French and English Case Law

Author: Marina MATOUSEKOVA

Type: Article

ref: 22008141-163

N0:2 of 2008

Pages: 141-163

The present article offers a comparative analysis of case law rendered by English and French courts, in domestic and community law, as to insolvency of cross border groups of companies. In domestic law, the principle applied is that of a separate treatment of the insolvency of each entity of a group, save in extremely rare cases of characterized abuse of legal personality, which allow, on the ground of the confusion and piercing of the corporate veil theories, to extend the insolvency proceedings of one entity against other entities of the group (that may even be solvent) with the heavy consequences it entails for third parties. The recent adoption in England of the UNCITRAL model law on international insolvency could allow finding more adapted solutions, such as those retained in community law. In this field, English courts innovated by recognizing, on the ground of the jurisdictional criteria of the debtor’s main centre of interests of article 3.1 of the EC Regulation 1346/2000, the possibility of centralizing before a unique court (that of the place of the head office functions) the various insolvability proceedings affecting the entities of a same group. French courts, which first sought to oppose the recognition in France of English opening judgments rendered against French subsidiaries, nowadays clearly accept and apply such case law.