Posts Tagged Videology
Videology: Snowden J’s textbook consideration of COMI under UNCITRAL Model Law and EU Insolvency Regulations.
Looking at my back queue for blog postings,  EWHC 2186 (Ch) Videology is one I do wish to bring to the attention of my readers. Snowden J refused to recognise proceedings under Chapter 11 of the US Bankruptcy Code (“Chapter 11”) in relation to Videology Ltd as a foreign main proceeding under Article 17 of the UNCITRAL Model Law on Cross-Border Insolvency (“the Model Law”) as incorporated into English law in Schedule 1 to the Cross-Border Insolvency Regulations 2006 (the “CBIR”). He did so because he was not satisfied that the centre of main interests (“COMI”) of the Company was in the US where the Chapter 11 proceedings are taking place. He did, however, grant recognition of the Chapter 11 proceedings as a foreign non-main proceeding.
The Judgment is a master class on COMI determination. Of note are
- at 28 the rejection of, for so long as the UK remains a party to the Recast EIR, any different approach in relation to the concept of COMI under the CBIR/Model Law and the Recast EIR;
- the emphasis on a basket of criteria required to displace the presumption of COMI in place of the registered office;
- at 42 ff the rejection of a narrow focus on, or attachment of overriding importance to, the location in which the directors and senior management act;
- Snowden J’s rejection at 46 ff of the Head Office approach as being determinant under EU law (see also Handbook heading 18.104.22.168.4); and
- the factors referred to eventually to uphold the presumption: at 72: ‘In addition to being the place of its registered office, the UK is where the Company’s trading premises and staff are located, where its customer and creditor relationships are established, where it administers its relations with its trade creditors on a day-to-day basis using those premises and local staff, and where its main assets (the receivables and cash at bank) are located. All of those factors will be visible and immediately ascertainable by the customers, and in particular by the trade creditors, of the Company. The UK is also, importantly, where representations were made to the Company’s main finance creditor that its COMI was situated.’
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1 (specifically also 22.214.171.124.4 for the Head Office discussion).