One of the first Recast Regulation cases (Advalorem Value Asset Fund Ltd v Gregory King)

One of the first Recast Regulation cases (Advalorem Value Asset Fund Ltd v Gregory King)

We look at one of the first cases in the EU considering the provisions of the Recast Regulation on Insolvency 2015/848. The Supreme Court of Gibraltar considered the provisions regarding the centre of main interests (COMI) of a bankrupt individual.

Original news

Advalorem Value Asset Fund Ltd v Gregory King, Supreme Court of Gibraltar, 2016/COMP/039

In one of the biggest changes for cross-border restructuring and insolvency lawyers in the last 17 years, substantial reforms are made to the Regulation (EC) 1346/2000 on insolvency proceedings (the EC Regulation on Insolvency) under the Regulation (EU) 848/2015 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) (the Recast Regulation on Insolvency). This is one of the first cases to consider these new provisions.

What are the practical implications of this case?

Although this case from the Supreme Court of Gibraltar is not binding on English courts, they are likely to find it persuasive on interpreting the new provisions of the Recast Regulation on Insolvency as it will be some time before cases start reaching the level of the EU Court of Justice. Specifically, the Supreme Court of Gibraltar decided that:

  • the Recast Regulation on Insolvency applied rather than the EC Regulation on Insolvency; even though the application for bankruptcy was issued before 26 June 2017, the judgment opening insolvency proceedings occurred after that date
  • the applicable COMI test for this individual debtor was for an individual exercising independent business or professional activity
  • the debtor's centre of main interests (COMI) was in Gibraltar

Despite the Brexit vote, the Recast Regulation on Insolvency still currently applies to England and this is one of the first cases discussing the COMI of individuals. Specifically, although this debtor was resident in one country (here, Spain), he showed no sign of actually carrying out his business there. On the contrary his business, so far as the evidence showed, was exclusively in another country (here, Gibraltar), meaning his COMI was in Gibraltar.

What was this case about?

The debtor,

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About the author:
Kathy specialises in restructuring and cross-border insolvency. She qualified as a solicitor in 1995 and has since worked for Weil Gotshal & Manges and Freshfields. Kathy has worked on some of the largest restructuring cases in the last decade, including Worldcom, Parmalat, Enron and Eurotunnel.