Joël Lozeman*
On 16 and 17 April 2024, the sixth edition took place of the Bob Wessels Insolvency Law Collection Foundation (BWILC) PhD workshop. This was a special edition: for the first time this workshop was held not in Leiden (nor online), instead, it was hosted atthe Mykolas Romeris University (MRU) in Vilnius, Lithuania. During the event, twelve PhD candidates from universities across Europe presented their research to fellow PhD researchers and other senior academics in the field of international and European insolvency law. This year, the board awarded again three prizes to the most convincing research presentations and one prize for the most original poster presentation.
For a photo report of the workshop, click here.
Day 1 – How to deal with today’s challenges in insolvency law?
The PhD workshop started with warm words of welcome by Prof. Virginijus Bité (MRU, Lithuania) and Prof. Reinout Vriesendorp (Leiden University, the Netherlands, and chair of BWILC). Both stressed the importance of collaboration between universities and their researchers. This was easily evidenced, as the idea of holding this year’s workshop at MRU originated from a research visit of Dr. Remigijus Jokubauskas (MRU) to Leiden University in December 2023. Unfortunately, Prof. Em. Bob Wessels, patron of BWILC, was not able to attend the workshop physically, but he managed to digitally welcome this year’s participants and gave them advice on how to make the most out of the workshop.
Evaldas Mikalajunas (MRU, Lithuania) started the workshop with his presentation on crypto-assets in insolvency law. First, he explained the essence of crypto-assets by comparing a blockchain with a book, a wallet with a pen to write the book, and smart contracts as the language required to read the book. He then discussed various issues (e.g. how to deal with the irreversibility of a fraudulent transfer of crypto-assets prior to insolvency) as well as opportunities (e.g. there is no need for an auction of the assets as there is already a market) that companies face when dealing with crypto-assets in insolvency. The next speaker was Matthew Chippin (University of Leeds, England). Following his attendance last year, he presented his advanced research on the anti-deprivation rule, which is a rule of public policy known for instance in Canada and the UK that prevents parties from taking assets from the estate upon an entity’s insolvency. Adopting a legal traditions approach to his comparative research, he identified differences between the English and Canadian application of this rule and explained how the rule relates to the pari passu rule and to ipso facto clauses. On the question what the EU can learn from this, he responded that there may not be easy answers. Law in the books is often very different from law in action – this turned out to be a recurring point during the workshop.
After a short break, it was time for three poster presentations. First, Monika Masnicka (University of Gdansk, Poland) presented her research on the pre-pack under Polish bankruptcy proceedings and how to deal with practical issues that arise (which was, again, all about law in action). She presented the results of her empirical research on Polish pre-packs. Second was Marta Cirillo (University of Trento, Italy), who discussed the Record of Meeting on cross-border insolvency between Mainland China and Hong Kong S.A.R (the Record of Meeting) and the way EU legislation may help to solve future cross-border issues (and she – quite literally – opened the door for that on her poster). The third poster presentation was given by Frederic Polis (University of Antwerp, Belgium). Having recently started his research, he talked about the ‘enigma’ of digital currency collateralization. He will first study the extent to which these currencies can be used as collateral under Belgian law, after which he aims to come up with recommendations to reform Belgian and EU law.
Law in the books is often very different from law in action – this turned out to be a recurring point during the workshop.
The intermezzo with poster presentations was followed by one more research presentation and the BWILC lecture. The next presenter was Edoardo Piermattei (University of Bologna, Italy) who presented his research on the insolvency framework of smaller banks within the EU. After explaining the current EU framework for smaller banks (including the Commission’s proposal to reform it) and the approaches adopted by some of the Member States, he aimed to ‘take the bull by the horns’ by introducing a new institutional approach for a unique European non-systemic bank’s insolvency framework. Edoardo’s presentation will also be remembered for his use of the most impressive animations and effects to support his presentation.
This year’s BWILC lecture was delivered by Dr. Giulia Ballerini (University of Padova, Italy) and was titled ‘Environmental claims in corporate insolvency: problems and strategies’. She first showed how the clash of environmental law and insolvency law shifted the question from whether the “polluter should pay” to whether the “creditors should pay”. Then, she explored different strategies on how to deal with environmental claims in insolvency law and the impact they have on the distribution of the estate.
In the evening, the participants had the opportunity to connect with each other during a social program. This started with a ‘refreshing’ walk around the Castle of Trakai. After the visit, the participants had a well-deserved dinner against the background of a musical performance by a professional violinist – a surprise arranged by our hosts from MRU.
Day 2 – Multidisciplinary approaches and searching for a common ground
Before starting the substantive program of the second day, Gert-Jan Boon (Leiden University, the Netherlands) introduced the new BWILC research blogs. These blogs, that will be regularly published on the BWILC website, will discuss the interesting research that is conducted by the workshop participants.
After this, Lana Gotvan (University of Ljubljana, Slovenia) kicked-off with the morning session and presented her research about the initiation problem in insolvency law, i.e. the problem that insolvency proceedings are often filed too late by debtors. First, she illustrated that late initiation could lead to a lower distribution to creditors and reduces the chances that a company survives. Then, she explained her behavioural law and economics approach, which combines both (classical) legal-doctrinal research with empirical methods, such as interviews and a vignette study. Inspired by the ‘carrot-and-stick-model’, she aims to analyse (legal) incentives that could address this problem. The next speaker was Sara Ludwig (Martin-Luther-University Halle-Wittenberg, Germany). Her research is about the transposition of Article 19(a) of the Preventive Restructuring Directive (PRD) – the provision about fiduciary duties of directors in case there is a likelihood of insolvency – into German, Austrian and Irish national law. More specifically, she focused on the director’s duty to have regard of the interests of creditors. After reflecting on the main differences between the domestic approaches, she invited the attendees to vote on whether they thought Article 19(a) PRD should be implemented in domestic law either through statutory law or through case law. The voting resulted in a 50/50 division, which immediately opened the floor for a substantive debate.
After the break, two more posters were presented. Jaime Vázquez García (Autonomous University of Madrid, Spain) presented his poster on how to come up with efficient private international law rules for cross-border restructuring procedures. Now at the start of his research, Jaime raised different topics that could be relevant for further harmonisation. In addition, Stella Kapräne (University of Latvia, Latvia) presented her research about the protection of trademarks and other intellectual property rights under insolvency proceedings. She discussed, amongst others, the problem that trademarks closely connected to a debtor in financial distress tend to drop in value (especially in the luxury goods sector), which leads to a lower return for creditors.
The next speaker was Dorota Nowacka (European University Institute, Italy). She presented her research on the ranking of creditors in insolvency proceedings. By using a functional comparatist research method, she aims to evaluate how different classes of creditors are treated in the distribution under Spanish, Irish, Italian and Polish law. During the debate, it was considered that the ranking of creditors remains one of the hardest topics for finding common ground, as many domestic procedures have their own and often peculiar characteristics. The last speaker of the day was Shuaihao Mi (University of Leeds, England). He discussed whether or not the Mainland China’s courts would recognise the Hong Kong High Court’s winding-up order against the China Evergrande Group, i.e. the world’s most indebted Chinese real estate developer (a Hong Kong entity). After discussing possible legal bases for this recognition (of which the aforementioned Record of Meeting seemed the most relevant one), he discussed what the impact of this case would be on the chances of China adopting the 1997 Model Law on Cross-Border Insolvency.
After two days of inspiring presentations and discussions, the PhD workshop was concluded by Prof. Reinout Vriesendorp. After the lunch, many of us did not go home but, instead, stayed in Vilnius to attend the subsequent Conference on European Restructuring and Insolvency Law (CERIL), titled ‘Preventive Restructuring in Europe, the PRD at Five: from Policy to Practice’.
Awarding prizes and looking forward to 2025
During the PhD workshop, the participants competed for prizes. These prizes were awarded by Prof. Reinout Vriesendorp during the CERIL dinner on Wednesday 17 April, based on the results of the jury this year comprised of Prof. Joeri Vananroye (KU Leuven, Belgium), Prof. Stephan Madaus (Martin-Luther-University Halle-Wittenberg, Germany), Gert-Jan Boon and Prof. Reinout Vriesendorp. The first prize was awarded to Lana Gotvan. Sara Ludwig received the second and the third prize went to Edoardo Piermattei. Finally, Frederic Polis received the prize for the most appealing poster presentation.
The BWILC board is looking back on a very successful event and expresses its sincere gratitude to MRU for hosting it. Further, the board is happy to announce that there will be a seventh edition of the PhD workshop taking place in Spring 2025.
Edoardo Piermattei (third prize) and Frederic Polis (poster prize)
* Joël Lozeman is adjunct secretary of BWILC and a PhD Candidate at Leiden University, The Netherlands.