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92 Am. Bankr. L.J. 53 (2018)
What Is an Insolvency Proceeding

handle is hein.journals/ambank92 and id is 61 raw text is: What is an Insolvency Proceeding? by Horst Eidenmdler* Insolvency proceedings and issues relating to personal and business insol- vencies are the daily subject of scholarly work and insolvency practice. But what is an insolvency proceeding? And why is this an important question? This arti- cle deals with a specific regulatory problem that is raised by these questions, namely: the necessary features of a proceeding in a cross-border context for the proceeding's effects to merit immediate, universal recognition. The article's goal is normative, i.e. it seeks to shape insolvency policy and lawmaking. Existing approaches to the regulatory problem examined in this article are used as a stepping-stone to develop a more convincing regulatory model. The article's main thesis is that: in a cross-border context, only 'fully collective' proceedings should be characterized as insolvency proceedings such that their effects merit immedi- ate universal recognition. Proceedings are fully collective in that sense if individ- ual claim enforcement of all creditors is impeded, e.g., by a stay or by the possibility of rights modifications. Based on this test, U.S. Chapter 11 and the German Insolvenzordnung are insolvency proceedings. The French procedure de sauvegarde financire acc~l~r&, by contrast, is not an insolvency proceeding, and the English Scheme of Arrangement is not one either. I. INTRODUCTION Across the globe, procedures to restructure financially distressed busi- nesses are increasing in importance. In Europe, for example, many Member States are experimenting with novel rescue procedures to save (more) viable but financially distressed businesses.I Prima facie, many of these procedures are very different from 'classical' insolvency proceedings.2 Unlike classical in- solvency proceedings, restructuring procedures now usually begin before in- *Dr iur, LLM (Cantab), MA (Oxon), Freshfields Professor of Commercial Law at the University of Oxford and ECGI Research Associate. I would like to thank the participants in the Business Law Work- shop at the University of Oxford's Faculty of Law (Oct. 28, 2015) and in the 3CL Seminar of the Univer- sity of Cambridge's Faculty of Law (Nov. 29, 2016) for thoughtful comments. Special thanks to Kristin van Zwieten, John Maslen, two anonymous reviewers and, in particular, Jonathan Lipson for detailed feedback. 'See Horst Eidenm1tler, Comparative Corporate Insolvency Law 21-25 (June 23, 2016) (forthcoming in JEFFREY N. GORDON & WOLF-GEORG RINGE EDS., THE OXFORD HANDBOOK OF CORPORATE LAW AND GOVERNANCE (2018)), available at https://ssrn.com/abstract=2799863. 2Bankruptcy law is the term more used in the U.S., insolvency law is more common elsewhere in the world, especially in the U.K. I am using both terms interchangeably.

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