Q&As

Do foreign companies subject to foreign insolvency procedures benefit from the English law rules that allow office-holders to assign claims?

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Published on LexisPSL on 14/10/2020

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

  • Do foreign companies subject to foreign insolvency procedures benefit from the English law rules that allow office-holders to assign claims?

Do foreign companies subject to foreign insolvency procedures benefit from the English law rules that allow office-holders to assign claims?

Under English law, insolvency office-holders are permitted to assign certain claims and causes of action, including wrongful trading and antecedent transaction claims. For further information, see Practice Notes: Antecedent transaction claims by an office-holder in liquidation or administration and Wrongful trading claims under sections 214 and 246ZB of the Insolvency Act 1986. Whether these powers may be extended to a foreign office-holder in a foreign insolvency proceeding will depend on the basis of recognition sought and whether the office-holder intends to open separate insolvency proceedings in the UK.

The first issue to consider is whether the Regulation (EU) 848/2015 (Recast Regulation on Insolvency) applies. If so, and main proceedings have been opened in another EU member state, the laws of that Member State will apply to, and be recognised by, other Member States (including the UK) insofar as they relate to the effect of the insolvency proceedings (see Article 7(2)(c) of the Regulation (EU) 848/2015 (Recast Regulation on Insolvency)).

If the Recast Regulation on Insolvency applies and the office-holder opens secondary proceedings in the UK (for which there will need to be an establishment), English law will govern those secondary proceedings but those proceedings will be limited to assets in the English jurisdiction. If the nature of

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