This contribution focuses on the interaction between three phenomena: corporate restructuring, choice of law, and transaction avoidance. In this context, scholars have criticised Art. 13 of the European Insolvency Regulation for providing a possibility for forum shopping. This article enables firms to declare the law of the eu Member State where the provisions on transaction avoidance allow for the most freedom to take restructuring measures applicable to contracts. Literature on company restructuring shows that a combination of restructuring measures – usually additional credit for additional conditions and/or collateral - helps companies overcome financial distress. We argue that rules on transaction avoidance should take this balance into account when voidance is demanded. Using the example of Dutch and German rules on transaction avoidance, we argue that the German rules are more accommodative than the Dutch rules. Therefore, firms may benefit using the German rules on transaction avoidance rather than the Dutch rules.
European Journal of Comparative Law and Governance – Brill
Published: Mar 10, 2014
Keywords: European Insolvency Regulation; company restructuring; forum shopping; transaction avoidance