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the creditors of the transfer. In the years leading up to Brexit, a number of large European
corporate groups availed themselves of this possibility by transferring their COMI to

the United Kingdom in order to benefit from the available restructuring options. 27

The effectiveness of this regime is secured by the obligation of the
Member States to automatically recognise the opening of the proceedings and the effects
that derive from them, including a moratorium. De facto, this regime prohibits the
28
review of the determination of COMI carried out by the opening authority, which cannot
be challenged by the requested court. This feature has been key to the appearance of
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insolvency tourism across the EU. The same rule applies to every measure adopted by
the opening authority concerning the course and closure of the proceedings, such as the
appointment of an insolvency practitioner, the setting aside of a detrimental transaction
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or a court-approved composition. The automatic recognition and enforceability of
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these decisions and the possibility for insolvency practitioners to act across the EU with
the same powers as in the opening State (including the power to remove debtor’s assets

from the territory of the Member State in which they are situated) creates a European
single market for insolvency and debt restructuring. The content of the national
insolvency and pre-insolvency laws continue to be defined nearly exclusively by the

Member States, but once one of them has been activated pursuant to the opening of
proceedings, its effects expand through the European Union without further requirements.

The principle of universalism that inspires this regime is not absolute. The first
mitigation concerns the possibility to open secondary proceedings in other

Member States provided that the ailing party has a permanent establishment within its
territory. While these ancillary procedures are governed by their own lex concursus,
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27 For example, Hans Brochier Ltd v. Exner [2006] EWHC 2594; Re Hellas Telecommunications
(Luxembourg) II SCA [2009] EWHC 3199 (Ch).
28 Articles 19 and 20 EIR recast.
29 Case 341/04, Eurofood IFSC Ltd ECLI:EU:C:2006:281, paras [60–64].
30 According to Annex II, the Regulation applied to the following insolvency practitioners in the UK:
liquidator, supervisor of a voluntary arrangement, administrator, official receiver, trustee, provisional liquidator,
interim receiver and judicial factor.
31 Article 32 EIR recast.
32 Article 3(2) EIR recast.

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