“The company has long history, Signore. It was relocated 3 months ago entirely for bankruptcy tourism”

The new definition of the center of main interests as a measure to prevent forum shopping

Professor Dr Georgios Triantafyllakis

Faculty of Law, Democritus University

Ένα φάνταςμα πλανιζται πάνω από τισ διεκνείσ πτωχεφςεισ, εκείνεσ δθλαδι των οποίων οι επιπλοκζσ καταλαμβάνουν περιςςότερεσ χϊρεσ – το φάνταςμα του forum shopping – τθσ μετακίνθςθσ δθλαδι του κζντρου των κφριων ςυμφερόντων (COMI) εταιριϊν που βρίςκονται ςτα πρόκυρα τθσ πτϊχευςθσ, ςε χϊρεσ που πιςτεφουν ότι το πτωχευτικό τουσ δίκαιο και τα δικαςτιριά τουσ κα τουσ προςφζρουν καλφτερο-ευνοϊκότερο αποτζλεςμα.

Η τάςθ αυτι εντείνεται ολοζνα και περιςςότερο, όςο ςυντελείται θ ολοκλιρωςθ τθσ ΕΕ ςε μία ενιαία αγορά (Single Market) αλλά και όςο θ διαρκισ δθμοςιονομικι αλλά και υφεςιακι κρίςθ που μαςτίηει τθν ευρωπαϊκι οικονομία οδθγεί ςε πτϊχευςθ τεράςτιο αρικμό επιχειριςεων.

Η παροφςα κρίςθ (από το 2007) προςφζρει πεδίο λαμπρό εφαρμογισ του κανονιςμοφ 1346/2000 (Insolvency Regulation), ο οποίοσ, όπωσ κα δοφμε, παρζχει τθ δυνατότθτα ςτον οφειλζτθ (ιδιϊτθ ι εταιρία) που αντιμετωπίηει οικονομικι καταςτροφι, να ανοίξει, όπωσ λζγεται χιουμοριςτικά, το χάρτθ τθσ Ευρϊπθσ και να ςπεφςει να ηθτιςει τθν κιρυξθ τθσ πτϊχευςθσ ςε χϊρα που είναι πιο φιλικι για τα ςυμφζροντά του (debtors friendly, ςυνικωσ Ην.Βαςίλειο), ζχοντασ μεταφζρει προθγουμζνωσ εκεί, με ςυνοπτικζσ διαδικαςίεσ το κζντρο των ςυμφερόντων του (κατοικίασ ι διοίκθςθσ) (Comi migration)

Είναι κακό αυτό; Εκ πρϊτθσ άποψθσ οι περιςςότεροι κα τείνουν να ςυμφωνιςουν ότι θ «περιγραφι» αυτι τθσ εκνικισ νομοκεςίασ, είναι επιηιμια για τα ςυμφζροντα των πιςτωτϊν. Είναι όμωσ ζτςι;

Τα πράγματα δεν είναι τόςο απλά, δεδομζνου ότι ςυχνά θ μεταφορά αυτι του COMI, ςυνδζεται με μεγιςτοποίθςθ τθσ αξίασ (maximizing value) ι και με αναδιάρκρωςθ του χρζουσ των υπό πτϊχευςθ εταιριϊν, οι οποίεσ ζτςι διαςϊηονται, επωφελεία και των εργαηομζνων ς’ αυτζσ.

Το επιλεγόμενο ςτα πλαίςια του forum shopping δίκαιο (ςυνικωσ βρετανικό) προςφζρει αφενόσ ταχείεσ, απλοποιθμζνεσ και ευλφγιςτεσ διαδικαςίεσ, αφετζρου δε τεχνικζσ και τρόπουσ αναδιάρκρωςθσ, κυρίωσ ςυμφωνίεσ πιςτωτϊν – prepacks –που δεν προβλζπονται ςε άλλα δίκαια, αςκϊντασ ζτςι πίεςθ ςτθ βελτίωςι τουσ (race to the top).

Από τθν άλλθ πλευρά δεν είναι λίγοι εκείνοι που κατακρίνουν τθν ευκολία αυτι μεταφοράσ του COMI και το αναπτυςςόμενο forum shopping, επιςθμαίνοντασ ότι ζτςι φκίνει το επίπεδο προςταςίασ των πιςτωτϊν (race to the bottom), διαταράςςοντασ κατ’ αυτόν τον τρόπο τθν ομαλι λειτουργία τθσ αγοράσ (ζλλειψθ εμπιςτοςφνθσ, αναςφάλεια δικαίου, ακριβότερεσ πιςτϊςεισ και μεγαλφτερεσ εξαςφαλίςεισ), τθν οποία ικελε ρθτά να προςτατεφςει ο Κανονιςμόσ.

Υπάρχουν ακόμθ περιπτϊςεισ που θ ευκολία με τθν οποία με τθν οποία επικυρϊνεται από δικαςτιρια του Ην.Βαςιλείου θ μεταφορά του COMI και θ προκυμία αποδοχισ των εκελοντικϊν αναδιαρκρϊςεων επωφελζια των ενδιαφερομζνων επιχειριςεων και των μεγαλφτερων (και καλφτερα εξαςφαλιςμζνων) πιςτωτϊν τουσ (κυρίωσ Τράπεηεσ, senior and secured creditors), επί ηθμία των μικρϊν κυρίωσ ι αναςφάλιςτων πιςτωτϊν (unsecured and subordinated creditors), ζχει οδθγιςει κάποιεσ φωνζσ να μιλοφν, με αρκετι κακοικεια, περί του Λονδίνου ωσ ενόσ ιδιότυπου «brothel for bankrupts».

Αν το Λονδίνο ζχει καταςτεί θ “restructuring capital of Europe” ι το “Delaware τθσ Ευρϊπθσ” απομζνει να το δοφμε:

Το ακόλουκο παράδειγμα παριςτά ανάγλυφα των όλθ προβλθματικι.

Η εταιρία Wind Hellas, ζνασ από τουσ μεγαλφτερουσ τθλεπικοινωνιακοφσ παρόχουσ τθσ Ελλάδασ (που διακζτει και κρατικι άδεια τθλεπικοινωνιϊν), με τηίρο άνω του 1 δισ ςτο χρόνο, ανακοινϊνει αιφνίδια κατά τθ διάρκεια παρουςίαςθσ των αποτελεςμάτων τθσ του βϋ τριμινου (Ιουνίου 2009), ότι διακζτει ταμειακό υπόλοιπο 32 εκ. ζναντι υποχρεϊςεων καταβολισ τόκων 67 εκ. Ευρϊ, ενϊ τα δάνεια του ομίλου Wind ανζρχοντο ςε 3,2 δισ, με εγγυιτρια μζρουσ αυτϊν τθν Wind Hellas.

Η ζκπλθξθ και θ απορία τθσ αγοράσ γίνεται ακόμθ μεγαλφτερθ όταν θ εταιρία δθλϊνει ότι αξιολογεί «εναλλακτικζσ μορφζσ κεφαλαιακισ τθσ αναδιάρκρωςθσ». Προσ τοφτο δε μεταφζρεται ςτο Λονδίνο θ διοίκθςι τθσ (administration) τθσ μθτρικισ τθσ, Hellas II, ενόσ υβριδικοφ μορφϊματοσ διεπόμενου από το δίκαιο του Λουξεμβοφργου, με χαρακτθριςτικά μεταξφ εταιρίασ και partnership, του οποίου ςχεδόν μοναδικό περιουςιακό ςτοιχείο ιταν οι μετοχζσ τθσ Wind Hellas.

Τρεισ μινεσ μετά, θ Hellas II, ηθτά τθν ζκδοςθ από το βρετανικό πτωχευτικό δικαςτιριο διάταξθσ (administration order) που να επιτρζπει το διακανονιςμό των οφειλϊν τθσ με αναδιάρκρωςθ του χρζουσ τθσ. Ο διακανονιςμόσ ςυντελζςκθκε με προςυμφωνθμζνθ πϊλθςθ (prepackaged sale) του κφριου περιουςιακοφ ςτοιχείου τθσ –που ιταν οι μετοχζσ του επιχειρθςιακοφ μζλουσ του ομίλου, τθσ Wind Hellas- ςε μια νζα εταιρία μζλοσ του ίδιου ομίλου, ζναντι τιμιματοσ εγγφσ του 1,5 δισ Ευρϊ, αφινοντασ ακάλυπτουσ όλουσ τουσ πιςτωτζσ τθσ εταιρίασ που είχαν μειωμζνθ εξαςφάλιςθ (subordinated).

Από τα δεδομζνα αυτά τθσ υπόκεςθσ προκφπτει ότι ο μοναδικόσ λόγοσ τθσ μεταφοράσ τθσ διοίκθςθσ τθσ Hellas II ςτο Λονδίνο, θ οποία ςθμειωτζον ότι διατιρθςε τθν ζδρα τθσ ςτο Λουξεμβοφργο, ιταν θ ταχεία και αποτελεςματικι πϊλθςθ, με τουσ όρουσ τθσ prepackaged administration, των ςτοιχείων τθσ (άφεςθ χρζουσ και λιψθ μετοχϊν κυγατρικισ του ομίλου) εκ μζρουσ των senior creditors, κάτι που δεν προβλζπετo ςτθ νομοκεςία του Λουξεμβοφργου και τθσ Ελλάδασ (απαγόρευςθ τόςο των εγγυιςεων τθσ κυγατρικισ προσ μθτρικι (άρκρ. 23α ΚΝ 2190/1920) όςο και 479 ΑΚ.

Είναι χαρακτθριςτικό ότι το αγγλικό δικαςτιριο δεν απαςχόλθςε κακόλου που ευρίςκετο μζχρι τθ μεταφορά το πραγματικό επιχειρθςιακό κζντρο του ομίλου που πραγματοποιείτο το ςφνολο ςχεδόν του τηίρου του ομίλου και οι ςυναλλαγζσ με πελάτεσ, οφτε το πϊσ κατόρκωςε θ Hellas II να μεταφζρει το επιχειρθςιακό τθσ κζντρο ςε μόλισ τρεισ (3) μινεσ ςτο Λονδίνο.

Κατά τθν εκτίμθςθ του δικαςτι Lewison ιρκεςε

–ότι πλθροφορικθκαν οι πιςτωτζσ τθ μεταφορά τθσ διοίκθςθσ ςτο Λονδίνο, -ότι ανοίχτθκε τραπεηικόσ λογαριαςμόσ και ότι (το ςθμαντικότερο απ’ όλα) οι διαπραγματεφςεισ αναδιάρκρωςθσ μεταξφ τθσ εταιρίασ και των πιςτωτϊν ζλαβαν χϊρα ςτο Λονδίνο (“most importantly, all restructuring negotiations between the company and its creditors had taken place in London”).

Το γεγονόσ ότι ςτο Λονδίνο μεταφζρκθκε μόνο το company’s head office, αλλά όχι θ ζδρασ τθσ, δεν κρίκθκε κρίςιμο, δεδομζνου ότι θ ζμφαςθ δίδεται ςτο πρϊτο και λιγότερο ςτο δεφτερο.

Paraphrasing the words of Lord Denning in the US case Smith Kline French Laboratories v. Bloch [19831 1 WLR 730 at 733 (CA) “As a moth is drawn to the light, so is a litigant drawn to the UK. If he can only get his case into their courts, he stands to win a fortune”.

Application of EIR

ratione materiae - Collective insolvency

proceedings (divestment of the

debtor and the appointment of a

liquidator)

ratione personae

company or legal person

Natural persons -Professionals -- consumers

Ratione loci

COMI

International element

(assets, creditors, activities of

multinational firms)

Forum (jurisdiction)

Lex concursus (lex fori = applicable

law (Art. 4 EIR)

Connecting for the determination of

international jurisdiction within EU

Cross border insolvency Conflict of rival theories

Territoriality (state sovereignty)

Insolvency procedures are limited within one jurisdiction Cons: -Not efficient and effective in order to maximize the net volume of assets -Conflicts with: a) internal/single European market b) par condicio creditorum principle

Universalism Insolvency procedures include the entirety of debtor’s assets (even if located in other MS) Pros: -better coordination of restructuring in all MS -efficient and effective administration of cross border proceedings (1,8,16,19,20) maximization of net assets Cons: -Lack of certainty and foreseeability -unsecured creditors’ interests not fully protected

Compromise (limited universalism)

COMI (universalism)

Secondary proceedings (territoriality)

COMI: “the place where the debtor conducts the administration of his interests on a regular basis and is therefore ascertainable by third parties”

Head office (real seat theory)

“on a regular basis” (foreseeability, legal certainty) Objective criteria: -General supervision, strategic control, place of BoDs’ meetings, internal accounting, HR

“ascertainable by third parties” -intensive control visible by

creditors -presence of immovable property

-creditors are notified of the change of headquarters

-reorganization negotiations took place in the new COmi

FORUM

III.COMI: in general

COMI II

Presumption

Professionals etc: principal place of business

Other (e.g. consumer): habitual residence (corpus not animus)

Registered office (law of incorporation)

Forum Shopping

IV. COMI: Presumptions

V. FORUM SHOPPING: A fundamental “contradiction”?

[Recital (4) of Regulation 1346/2000: “It is necessary for the proper functioning of the internal market to avoid incentives for the parties to transfer assets or judicial proceedings from one Member State to another, seeking to obtain a more favourable legal position (forum shopping)”]

On the other hand, accepting the law of registered office (law of incorporation), as the governing law for cross-border insolvency issues (presumption of Art.3), opens the door for regulatory competition in bankruptcy law, between MS of EU (as to who would provide the most favorable regime) and promotes forum-shopping.

Regulatory competition (UK as favorable forum)

Advantages -innovative power of competition (Hayek) -better restructuring environment -anti-suit injuctions -timing of procedure (UK: 1,45 m., F: 3,05 m., D: 3,92 m. -benefits from prepackaged schemes of arrangements -more efficient forum

Forum shopping creates negative externalities (especially for unsecured or subordinated creditors, “weak” groups (see BGH 30.3.2000 VII ZR 370/98) - Lack of foreseeability - Additional costs - Difficult to investigate -Evidence of Banks’ satisfaction: UK: 92% F: 65,6% D: 67%

Race to nowhere?

Whereas Recitals 4 and 5 discourage any kind of forum shopping, EIR not only lacks relevant provisions to that direction, but it includes provisions –for the determination of COMI- that seems to encourage forum shopping

VI. Forum shopping as violation of EU law

Shopping for a particular insolvency regime is not per se illegal.

The courts allow COMI shifting in appropriate circumstances, acknowledging that taking advantages of another country’s insolvency system may be commercially crucial and is “merely the optimisation of procedural possibilities” (Opinion of Advocate General in Case C-1/04 „Susanne Staubitz-Schreiber“)

Under what circumstances a forum shopping (COMI shift) could amount to an abuse of freedom of establishment (“bad”)?

Should any Comi shift, whether faked or real, be considered as abuse of EU law?

Is only faked Comi shift “bad”?

The following distinction is proposed:

-“good” forum shopping which occurs where a debtor moves Comi to benefit creditors

- “bad” forum shopping which occurs where the debtor moves Comi at the cost of creditors

Abusive

- Use of law contrary to its purpose

(intention for abuse is not necessary)

COMI migration is not oriented to a “better” insolvency regime that would coordinate in a more efficient way the insolvency proceeding and maximize the net assets

But

to benefit the debtor (or certain creditors) at the expense of others (especially the unsecured and subordinated creditors violation of par condicio creditorum principle.

Note: BGH 20.3.1996 “when an insolvency application took place within three weeks after the migration (abusive behaviour)”

Kinds of forum shopping

Opportunistic Legitimate

Initiate insolvency proceedings to another MS,

seeking to obtain a more favourable legal position, not

to the detriment of others.

Faked (fraudulent)

Box-office company

Opinion Of Advocate General Colomer in Case C-1/04 (Staubitz-Schreiber)

71. If forum shopping is defined as the search by a plaintiff for the international jurisdiction most favourable to his claims, there is no doubt that, in the absence of legal uniformity in the different private international law systems, that phenomenon must be accepted as a natural consequence which is not open to criticism.

72. Thus the dispute is dealt with at the place which is most suitable for reasons of substance and procedure. Forum shopping is merely the optimisation of procedural possibilities and it results from the existence of more than one available forum, which is in no way unlawful.

73. However, where forum shopping leads to unjustified inequality between the parties to a dispute with regard to the defence of their respective interests, the practice must be considered and its eradication is a legitimate legislative objective.

Kinds of forum shopping

Opportunistic

Opening of insolvency proceeding in a MS where the

debtor, although not previously active, moved,

while in the vicinity of insolvency, in order to obtain a more favourable position (see

Recital 4)

Faked (fraudulent)

Abusive

- Use of law contrary to its purpose

(intention for abuse is not necessary)

COMI migration is not oriented to a “better” insolvency regime that would coordinate in a more efficient way the insolvency proceeding and maximize the net assets

But

to benefit the debtor (or certain creditors) at the expense of others (especially the unsecured and subordinated creditors violation of par condicio creditorum principle.

Illegal

COMI: a genius or an inherently fuzzy, ambiguous and maniputable concept ?

There is no doubt that COMI has become a magical word in the international insolvency literature and practice. It is not a coincidence that in the vast majority (70%) of case law the determination of COMI, and the fatal question where is the COMI, are the key point of every legal dispute.

The main interpretation problems that give rise to legal uncertainty, could be briefly summarized as follows:

1. COMI refers to the legal and/or operational headquarters?

2. What constitutes third persons? The members of BoDs, the employees of affiliated companies or creditors? Which creditors? The average creditor? The majority of them (by number or value)? The old and/or new creditors?

3. How easily is the presumption that COMI is the place of the registered office rebuttable?

[Case-law on Comi is not very clear (it rules out “letter-box” companies or front subsidiary) and repeats in a tautological way recital 13].

4. How can the transfer of the COMI of a company in distress (in the vicinity of insolvency) –for the purpose of benefit from the “best” insolvency law regime- be compatible with Recital 13 that states that COMI “should correspond to the place where the debtor conducts the administration of his interests on a regular basis …”? The notion of “regular basis” by no means implies immutability, but, in any case, requires a degree of permanence and contituity or at least a temporal stability.

In this context, let us recall that that the concept of „establishment“ within the meaning of the Treaty provisions on freedom of establishment involves the actual pursuit of an economic activity through a fixed establishment on a stable and continuing basis (or for an “indefinite period” (see C-196/04 Cadbury Schweppes (2006), 53-54)

CONCLUSION: COMI - Quo Vadis?

We therefore notice a fundamental contradiction: despite the fact that EIR seeks to prevent forum shopping (and ECJ has lent its strong support to this) it seems that it legitimizes (if not encourages) the circumvention of national rules in the name of freedom of establishment, to the detriment of creditors.

The proposed amendments to EIR are relatively minimal :

1. The inclusion of Recital 13 in Article 3(1)

2. Article 3(1) should include a presumption that in the case of an individual exercising an independent business or professional activity, the centre of main interests shall be that individual's principal place of business; in the case of any other individual, the centre of main interests shall be presumed to be the place of the individual's habitual residence in the absence of proof to the contrary.

3. Recitals could clarify that:

- when determining whether the COMI is ascertainable by third parties, special consideration must be given to the creditors and their perception as to where a debtor conducts its business. This may require, in the event of a shift of COMI, informing creditors of the new location from which the debtor is carrying out his business, e.g. by drawing attention to the change of address in an invoice, or making the new location public through other appropriate means.

- in order to determine the habitual residence, the courts dealing with insolvency proceedings concerning individuals who are not exercising an independent business or professional activity should make an overall assessment of the circumstances of the life of the individual at the time of the request to open insolvency proceedings, taking account of all relevant factual elements, in particular the duration and regularity of the individual’s presence in the Member State concerned and the conditions and reasons for that presence. The habitual residence thus determined should reveal a close and stable connection to the Member State concerned, taking into account the specific aims of this Regulation.