The "COMI" Concept in the Revision of the European Insolvency Regulation

After ten years, the European Insolvency Regulation (EIR, Council Regulation n. 1346/2000) is going to be reformed. The Proposal of Reform (2012) approaches to the problem of the identification of the debtor's Centre of Main Interests (COMI), confirming the value of the registration office as the main formal indicator of the firm's seat. I will first introduce the issue, by explaining the contents of the Proposal and its limits. From this point of view, the Proposal tries to solve some critical aspects of the Regulation, but at the same time it is still too weak (and formally silent) at least in order: (1) to the problem of "insolvency tourism", or abuse of forum shopping; (2) to the problem of the temporal relationship between the filing of the application for opening proceedings and the date of transfer of the seat. Second, I will examine the definition of COMI - according to the old version of the Regulation and to the forthcoming one - and the problems concerning the Multinational Firms. Finally, I will try to balance the fundamental freedom of establishment with the distortions caused by the "insolvency tourism". According to the theory of "abuse of law", each right has to be exerted correctly applying the law to a specific set of facts. Hence, there is not any fraud or violation in an abusive exercise of rights, but only a judgment of unfairness or impropriety regarding the behaviour of the entrepreneur. This judgement would be too expensive, if observed in a business context, and should be reduced to a few challenging cases. In concrete, the distinction between a legal behaviour and abuse could be found, on the one hand, in the comparison between the setting up of a company for the mere purpose of benefiting from more favourable legislation - included insolvency regulation and, on the other, for wholly artificial arrangements. A possibile balance may result from the empirical analysis of the case-law and the national regulations in order to the so called "suspect period" preceding the opening of the insolvency. It is usual, in fact, that abusive transfer of the seat occurs during the time in which creditors and other stakeholders start to file their claims against the debtor. This period is usually defined as the period which runs from the date on which the debtor ceases payments. Any transactions undertaken by the debtor in this period may be declared void. If they were undertaken against payment, proof would be needed that the persons entering into a contract with the debtor were aware that the latter had ceased payments. My final purposes are: a) to confirm the value of registration office as the most reliable indicator of the firm's seat, but also to strengthen the presumption of jurisdiction by introducing a system of "suspect period" rules; b) to build a system of a few uniform substantive insolvency rules, by inverting the method of harmonization. That's to say by taking from the international jurisprudence and the best practices the cases with the highest degree of uniformity and so trying to make a model law. In the context of the debate between universalism and territoriality, this represents a new approach to the need of a paradigm in the european insolvency regulation.