1. Die Justiz des Landes Nordrhein-Westfalen International Exchange of Experience on Insolvency Law (IEEI): 11th Colloquium, Prague, May 19 – 21, 2010 Judicial Communication in Cross-Border Insolvencies What is possible and what is not - The German Perspective

2. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Introduction Cross-Border Insolvency Proceedings: Need for Coordination ↔ Lack of Time 11th IEEI - Colloquium Prague, May 19 – 21, 2010 2

3. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Introduction  Continental Law Regimes: Based on codified laws  EU Insolvency Regulation: No obligation for courts to communicate  Not everything that is not explicitly permitted is inadmissible!  Courts have to identify and use the scope for communication with other courts. 11th IEEI - Colloquium Prague, May 19 – 21, 2010 3

4. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Introduction  Procedural law is purposive law!  § 1 Insolvency Act: Satisfaction of creditors as (InsO)procedural objective  § 5 InsO:ex officio – investigation  § 21 InsO: Court measures to avoid change in debtor´s assets to the detriment of the creditors until decision on opening of insolvency proceedings 11th IEEI - Colloquium Prague, May 19 – 21, 2010 4

5. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results ALI/III - Guidelines 2, 3  Compatible with German law  Basis: § 5 InsO (ex officio - duty) Wide discretion  Ex officio – principle can include an obligation to initiate communication to gather information, eg. concerning the assets of the debtor. 11th IEEI - Colloquium Prague, May 19 – 21, 2010 5

6. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results Problem of first contact:  European Judicial Atlas http://ec.europa.eu/justice_home/judicialatlascivil/html/cc_searchm unicipality_en.jsp#statePage0  Court Adress Data Base Germany Ministry of Justice of North Rhine – Westphalia http://www.justizadressen.nrw.de/og.php?MD=nrw 11th IEEI - Colloquium Prague, May 19 – 21, 2010 6

7. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results Language problem:  Help of (preliminary) administrator  Interpreters: Costs are justified in many cross-border cases: Substantial bankruptcy estates are to be distributed or big enterprises to be reorganised 11th IEEI - Colloquium Prague, May 19 – 21, 2010 7

8. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results German examples for cross-border communication:  PIN Group –Germany - Luxemburg –Court to Court –Decision to open main proceedings  Automold –Germany - England –Court to Administrator –Coordination of date of creditors´ meeting in secondary proceedings 11th IEEI - Colloquium Prague, May 19 – 21, 2010 8

9. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results ALI/III – Guideline 5  Different legal cultures: –Local Rules concerning ex parte communication –Nationwide uniform procedural rules  Germany: Courts can receive communications and respond directly 11th IEEI - Colloquium Prague, May 19 – 21, 2010 9

10. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results ALI/III – Guidelines 7, 8 German law:  Participation of lawyers in court-to-court communication not necessary  Opportunity to comment on intended communication  Information about outcome of communication  Judges can arrange communication 11th IEEI - Colloquium Prague, May 19 – 21, 2010 10

11. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results ALI/III – Guideline 9: Joint Hearings  German law:no provision  Creditors´ meeting via video conference – Problems: –Consent of participating creditors necessary? –Creditors´ meetings are not open to the public. –Sovereignty –Facilities 11th IEEI - Colloquium Prague, May 19 – 21, 2010 11

12. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results ALI/III – Guideline 9: Transmission of evidentiary or written materials German law:  No provision of materials in public system  Strict limitations of third parties´ right to inspect court files  Observation of standards for international legal assistance  Direct transmission between courts not admissible in most cases Exemption: Consent of all parties 11th IEEI - Colloquium Prague, May 19 – 21, 2010 12

13. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results ALI/III – Guideline 9 Compatible with German law concerning  Submissions and applications by party representatives  Coordination and resolution of procedural, administrative and preliminary matters relating to joint hearings  Communicaton after a joint hearing concerning coordinated orders Exemption: Coordinated orders conflict with binding substantive bankruptcy law 11th IEEI - Colloquium Prague, May 19 – 21, 2010 13

14. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results ALI/III – Guidelines 10, 11  Compatible with German law  Principle of „forum regit processum“ Art. 4, 25 EU Insolvency Regulation  Public policy – exemption Art. 26 EU Insolvency Regulation  Enforcement: –EU Insolvency Regulation: Art. 25 subparagraph 1, sentence 2: simplified procedure –non-EU Member States: Exequatur proceedings necessary (§ 353 InsO) 11th IEEI - Colloquium Prague, May 19 – 21, 2010 14

15. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results 11th IEEI - Colloquium Prague, May 19 – 21, 2010 15 Compatible with German lawNot compatible with German law Guideline 13 Appearance/admission of and consul- tation with a foreign administrator, creditors' representatives and the authorized representative of the foreign court Guideline 12 Information of Non-Resident Parties Guideline 15 Communication with courts in other jurisdictions regardless of the form of the proceedings Guideline 14 Limitation of stay of proceedings to the domestic proceedings Guideline 16 Amendments and modifications of court directions Guideline 17 “Disclaimer"

16. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results ALI/III – Guideline 1 Adoption of Guidelines  as general guidelines of a bankruptcy court or  in a protocol with a foreign bankruptcy court. 11th IEEI - Colloquium Prague, May 19 – 21, 2010 16

17. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results Protocols on Court-to-Court - Communication  Specification of guidelines which –can be applied –can be applied in a modified manner –cannot be applied.  Reservation of compliance with the law - a protocol cannot –limit procedural rights –interfere with a court´s international jurisdiction –interfere with a court´s decision making authority. 11th IEEI - Colloquium Prague, May 19 – 21, 2010 17

18. Die Justiz des Landes Nordrhein-Westfalen Judicial Communication in Cross-Border Insolvencies Results In a protocol on court-to-court – communication a German insolvency court can agree on 11th IEEI - Colloquium Prague, May 19 – 21, 2010 18 the applicability of Guideline the modified applicability of Guideline the non-applicability of Guideline 24 37 586 9sentence 2 lit. (a), (c), (e) 9 sentence 2 lit. (d)9 sentence 2 lit. (b) 10 1112 1314 15 16 17