The handling of insolvency within trans-European contractual networks: Legal issues and possible solutions

Abstract:

This paper tries to identify some tools which, in case of insolvency, might prove to be effective in order to take care of the specificities which characterise inter-firm contractual networks. To summarise, this paper is fundamentally an attempt to provide an answer to three general questions: What happens if one member of a trans-European contractual network files for bankruptcy? What are the shortcomings of the current regulation? How can the parties cope with these shortcomings?

The analysis focuses on the European Union for three basic reasons. The first is that contractual business networks are considered one of the most diffused forms of organisation at European level and their promotion could have a positive impact on the European economy. The second basic reason is that, within the European Union, a uniform regulation of transnational insolvency directly applicable in the Member States exists (with the exception of Denmark). The existence of such a common ground allows a relatively reliable analysis of transnational insolvency. In contrast, an analysis with a wider focus would be less dependable, since the regulation of transnational insolvencies is globally based on a quite intricate pattern of unilateral, bilateral, and multilateral forms of co-operation. The third reason is that the topic seems to fit well with the long-standing and still ongoing debate about the evolution of the existing insolvency regulation and the harmonisation of insolvency law at European level. So, even if this paper does not take a de jure condendo approach, it might fit into the context of the above-mentioned debate.