Insolvency( MLCBI) operates by reference to the individual debtor. Recognition turns on the location of the debtor’ s centre of main interests( COMI), and the Model Law presumes, in the absence of proof to the contrary, that the centre of main interests lies where the debtor has its registered office. This encapsulates an entity-by-entity approach, which may not align with the economic reality of the modern corporate group, typically managed as a single enterprise across multiple legal entities and jurisdictions. The UNCITRAL Model Law on Enterprise Group Insolvency( MLEGI) seeks to address these challenges by providing a framework for the coordinated treatment of enterprise groups. However, it may be some time before the MLEGI is widely adopted. In the meantime, developing a shared understanding of the challenges presented by enterprise group insolvencies remains a priority for judges.
The Judicial Committee’ s first paper will therefore explore the following issues:
( a) Letterbox or brass-plate incorporations, where the registered office reflects little or no genuine economic activity, thereby challenging the presumption that the place of registration and the centre of main interests coincide;
( b) Pre-filing changes or migration of the COMI, where management or head-office functions are relocated shortly before a filing in order to secure a particular forum, requiring the court to determine the weight to be given to arrangements of recent origin;
( c) The use of newly incorporated co-obligors, where a group introduces a new entity, often as the issuer or guarantor of group debt, in order to establish a sufficient connection to a chosen restructuring forum;
( d) divergent determinations across courts, where two or more courts reach different conclusions about the centre of main interests of related entities, giving rise to competing main proceedings and to problems of coordination; and
( e) The challenges presented by large and complex groups, where different creditor constituencies are located across multiple jurisdictions.
By setting out how courts have in fact approached these situations, the paper aims to identify the principles that can now be regarded as settled and to isolate the areas in which judicial approaches continue to diverge. Much of this analysis is likely, for the time being, to remain a matter for judicial consideration.
Work will begin with a preliminary survey across jurisdictions, which will inform the development of a report and the drafting of the paper in the coming months. All judicial committee members are encouraged to participate actively in this work. A questionnaire will be sent out shortly through the III Administrative Director to judicial committee members.
Academic Committee Update
On Sunday, June 14 in Montreal the Academic Committee began its proceedings with a joint program with the Judicial Committee. The Academics then met to discuss two papers:
• Andre Boraine and Ishana Tripathi, Specialised Courts, Tribunals and Adjudicators: Insolvency Adjudication in BRICS Jurisdictions( Comments by Anthony Casey)
• Shuai Guo, Defne Tasman and Alex Huang, Confidentiality, Secrecy, and Privilege in Corporate Insolvency( Comments by Ted Janger)
At the Committee’ s business meeting, new co-chairs were elected to a two-year term: Stephanie Ben-Ishai of Osgoode Hall Law School( Toronto, Ontario) and Stephen J. Lubben of Seton Hall University School of Law( Newark, New Jersey). New vice-chairs were elected as well: Anthony Casey of the University of Chicago Law School( Chicago, Illinois) and Michael Veder of Radboud University( Nijmegen, Netherlands).
35