Ireland as a Gateway to European Insolvency post Brexit
By Tom Murray, Friel Stafford Chartered Accountants
Currently, insolvency proceedings amongst member states of the European Union (‘EU’) (excluding Denmark) are subject to Regulation on Insolvency Proceedings 1346/2000. The regulation imposes a regime for dealing with the insolvency of companies and individuals with assets and corporate affairs in more than one EU member country and in this respect it introduced a set of rules on the jurisdiction to open and the recognition of insolvency proceedings across the EU.
This has given rise to ‘forum shopping’ amongst creditors and debtors in search of the most favourable regime. In this context, the UK with its well-established regime has a large appeal and favourable reputation on the international stage for cross border insolvency and restructuring.
The key implication of Brexit is that without an ‘exit’ agreement, UK insolvency proceedings will no longer benefit from automatic recognition across the EU. In a similar vein, the jurisdiction and enforcement of judgments between the UK and other EU member states is currently regulated by the Brussels I Regulation (44/2001) which will also cease to apply upon the completion of Brexit.
Given the economic crises that engulfed Ireland, the country now has one of the most progressive regimes for dealing with corporate and personal insolvency, and is now a better regime than the UK for debtors. Ireland has in recent years completely revised and refined its Corporate and Personal Insolvency Law through the Companies Acts 2014 and Personal Insolvency Act 2012 (as amended) respectively.
With the clock ticking on the countdown to the UK’s planned exit in 2019, and uncertainty being the only certainty in relation to how it will all eventually play out, there is a significant opportunity for Ireland to become a new safe destination of choice for creditors seeking to commence insolvency proceedings within the EU.
Tom MurrayFriel Stafford Chartered Accountants, Dublin, Ireland
T: +353 1 661 4066, F: +353 1 661 4145
Friel Stafford is Ireland’s leading independent corporate restructuring and personal insolvency practice.
Tom Murray is a Partner in the firm and former past President of the Association of Certified Accountants in Ireland. He specialises in Restructuring & Insolvency, Corporate Finance and Forensic Accounting.
Published: Winter 2017 l Photo: Patryk Kosmider - Fotolia.com