Q&As

Can new territorial proceedings be commenced in the UK after IP completion day?

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Published on LexisPSL on 12/01/2021

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • Can new territorial proceedings be commenced in the UK after IP completion day?
  • Territorial proceedings
  • Position post IP completion day
  • Summary
  • Other useful content

Can new territorial proceedings be commenced in the UK after IP completion day?

Territorial proceedings

Before IP completion day, Regulation (EU) 2015/848 (OJ L141/19), Recast Regulation on Insolvency (the EU Recast Regulation on Insolvency) applied in the UK to main proceedings, secondary proceedings and territorial proceedings (see Practice Note: Recast Regulation on Insolvency as between Member States—main, secondary and territorial proceedings).

Territorial proceedings were defined as where the debtor has an establishment, but main proceedings have not yet been commenced elsewhere (see Article 3(4) of the EU Recast Regulation on Insolvency) (ie a kind of precursor to secondary proceedings). If main proceedings were later commenced, they were automatically converted to secondary proceedings and the office-holder in the main proceedings could request the proceedings be converted to liquidation proceedings. If main proceedings did not follow, the proceedings continued as territorial proceedings (Virgos-Schmit report, paras 31, 38, 86), which are limited to the assets in that Member State.

Territorial proceedings could only be opened if (see Articles 3(4)(a)–(b) of the EU Recast Regulation on Insolvency):

  1. main proceedings cannot be opened

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