Verona, Italy

The Effects of the Opening of an Insolvency Proceeding

By Matteo Zanotelli, SLT Strategy Legal Tax

It is well known that the insolvency declaration of one party affects deeply the course of a civil/commercial proceeding. Each state provides specific rules on the matter, but, as far as the European Union is concerned, EU Regulation n. 848/2015 on cross-border insolvency governs the effects of the opening of an insolvency proceeding across the EU member states.

The above-mentioned Regulation specifies, among other things, which member state’s law shall apply on specific issues; in particular, according to Art. 7, lett. f), EU Reg. 848/2015, the law of the member state where the insolvency proceeding has been opened, (i.e. the so-called lex concursus) governs “[…] the effects of the insolvency proceedings on proceedings brought by individual creditors, with the exception of pending lawsuits”.

It is clear that the mentioned provision encompasses two different hypotheses.

Specifically, with the expression “proceedings brought by individual creditors”, the EU Regulation means those proceedings that have the scope of seizing the debtor’s assets; while, with the expression “pending lawsuits”, the EU regulation refers to those proceedings that deal with the merit of the dispute. In other words, the aim of the provisions is to ensure that the liquidation of the debtor’s assets is governed by the lex concursus (which usually prevents individual enforcement actions against the debtor), in order to ensure the so-called par condicium creditorum.

The contrary solution is instead provided for the proceeding concerning the merit of a dispute: the “pending lawsuits” mentioned in the last part of art. 7, lett. f), are governed by Art. 18 EU Reg. 848/2015, which provides that the effects on the dispute of one party’s insolvency “[…] shall be governed solely by the law of the Member State in which that lawsuit is pending or in which the arbitral tribunal has its seat”.

Matteo Zanotelli

Matteo Zanotelli

GGI member firm
SLT Strategy Legal Tax
Auditing & Accounting, Tax, Advisory, Corporate Finance, Fiduciary & Estate Planning, Law Firm Services
Verona, Italy
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SLT Strategy Legal Tax is a Verona-based firm that provides both legal and accounting services to a national and international clientele. The firm can count on the experience of over 40 professionals whose experience covers many areas of expertise, ranging from commercial, insolvency, and banking law to criminal, family, and labour law.

Matteo Zanotelli is a lawyer and member of the Professional Lawyers’ Association of Verona as well as a senior partner at SLT Strategy Legal Tax. His professional activity encompasses assistance to companies and other economic operators, mostly handling insolvency procedures, international trade law, and banking-law matters. He is a published author and speaker at events of a scientific and academic nature.

Published: Litigation & Dispute Resolution Newsletter, No. 11, Autumn 2019 l Photo: rh2010 -

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