What is an insolvency proceeding?

What is an insolvency proceeding?

Horst Eidenmüller

Series number :

Serial Number: 

Date posted :

December 01 2016

Last revised :

November 16 2017
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  • Insolvency Proceedings • 
  • Bankruptcy Proceedings • 
  • Cross-Border Insolvencies • 
  • Chapter 11 • 
  • Scheme of Arrangement • 
  • Procédure de Sauvegarde • 
  • Insolvenzordnung

Insolvency proceedings and issues relating to personal and business insolvencies are the daily subject of scholarly work and insolvency practice. But what is an insolvency proceeding? And why is this an important question? This article deals with these issues. Its main thesis is that: in a cross-border context, only ?fully collective?

proceedings should be characterised as insolvency proceedings such that their effects merit immediate universal recognition. Proceedings are fully collective in that sense if individual claim enforcement of all creditors is interfered with, e.g. by a stay or by the possibility to impose rights modifications. Based on this test, US Chapter 11 and the German Insolvenzordnung are insolvency proceedings. The French procédure de sauvegarde financiére accélérée is not an insolvency proceedings, and the English Scheme of Arrangement typically is not one either.