The Recast Regulation contains a codification of the method of determination of centre of main interests (COMI). COMI is a central concept that determines whether the Recast Regulation applies to a debtor and the jurisdiction for opening of main insolvency proceedings. COMI will be presumed to be at the registered office, but the presumption is rebuttable if the central administration is located in another Member State and a comprehensive assessment of all the relevant factors establishes, in a manner that is ascertainable by third parties, that the company’s actual centre of management and supervision and of the management of its interests is located in that other Member State. The registered office presumption will not apply if there has been a move of the registered office during the three months prior to the opening of proceedings. Although essentially stating what has been developed by case law since the Regulation, these new rules provide welcome clarity.
The Recast Regulation is extended in scope to new categories of proceedings. It covers hybrid and pre-insolvency proceedings and secondary proceedings will no longer be limited to liquidation proceedings where a company has an establishment. The definition of 'establishment' is amended to 'any place of operations where the debtor carries out a non-transitory economic activity with human means and assets' (using a reference to 'assets' rather than 'goods') and the relevant time for assessing an establishment will be either the time of the opening of the secondary proceedings or, alternatively, the three month period prior to that, so that secondary proceedings may still be possible even if an establishment has recently closed. In addition, the insolvency practitioner in the main proceedings is now expressly permitted to provide undertakings to treat local creditors as they would be treated under secondary proceedings.
Under the Recast Regulation, the courts of the member state where main insolvency proceedings are opened will also have jurisdiction to hear actions derived directly from the insolvency proceedings that are closely linked, such as avoidance actions, to avoid the risk of irreconcilable judgments resulting from separate proceedings.
There will be new linked registers of insolvency proceedings. The recast Regulation calls for both national electronically-searchable databases in each member state, and for these to then be linked via a central European e-justice portal. On 7 July 2014, the Commission announced a pilot scheme to connect insolvency registers in the Czech Republic, Germany, Estonia, Netherlands, Austria, Romania and Slovenia through the e-justice portal.