Creative Commons

This dissertation was written as part of the LLM in Transnational and European Commercial Law and Alternative Dispute Resolution at the International Hellenic University. Companies and individuals in the EU are increasingly establishing business activities or economic interests in EU countries in places different than their place of administration. If they become insolvent, there may be direct implications on the proper functioning of the internal market. It has already established a common framework for insolvency proceedings in the EU. Although, the Council is willing to set up a new Regulation on insolvency proceedings, in order to modernize the current rules on cross border insolvency which are dated from 2000. Adopted in May 2000, the Insolvency Regulation applies since 31 May 2002. Ten years after its entry into force, the Commission has reviewed its operation in practice and considers it necessary to amend the instrument and to introduce a more capable Banking Regulation instrument. It is becoming increasingly likely that a bank that is experiencing financial difficulties will have operations, or interests, in more than one jurisdiction. The insolvency of a bank that is operating on an international basis raises many legal problems and difficulties.1 The last ten years the scene in Europe has changed dramatically. Member States face for a long period of time a severe economic and financial crisis and this makes it necessary for a new Insolvency legal regime. As said by Vice-President Viviane Reding, "Europe needs modern rules on cross-border insolvency to help service our economic engine. The first option for viable businesses should be to stay afloat rather than liquidating [….]".2 I am very interested to examine the new rules which were proposed by the Commission in December 2012 which will help the companies avoid the liquidation and at the same time will protect creditors' rights to get their money back. The proposed law will increase the efficiency and effectiveness of cross-border insolvency proceedings, affecting an estimated 50 000 companies and 1.7 million jobs across the EU every year. This is a first step towards an EU "rescue and recovery" culture to help companies and individuals in financial difficulties.