1. Discussion on Chapter V (Insolvency of groups of companies) Moderator: Daniel Fritz, HERMANN RWS, Frankfurt am Main Dr. Irit Mevorach, University of Nottingham, School of Law Michael Thierhoff, Thierhoff Müller & Partner, Leipzig

2. Chapter V (Insolvency of groups of companies) – a critical appraisal Dr. Irit Mevorach University of Nottingham School of Law

3. Addressing the group problem Defining “group of companies” (and related terms) Referring to holding and parent companies in the definition of COMI Proposing the concept of “group main proceedings” Proposing the concept of “substantive consolidation” Proposing the concept of a “European rescue plan”

4. Chapter V – Insolvency of groups of companies Opening of group main proceedings (art. 43) Coordination powers attributed to the liquidator of the group main proceedings – By analogy to main-secondary proceedings with modifications (art. 44) – Rescue measures in subsidiary proceedings (art. 45) Substantive consolidation in limited circumstances (art. 46)

5. Ultimate EU parent Ultimate EU parent EU subsidiary EU subsidiary EU subsidiary EU subsidiary EU sub- subsidiary EU sub- subsidiary EU sub- subsidiary EU sub- subsidiary Types of groups’ structures “group of companies” shall mean a number of companies consisting of parent and subsidiary companies; UNCITRAL-“Enterprise group”: two or more enterprises that are interconnected by control or significant ownership;

6. “In view of the drawbacks of.. shifting the subsidiary’s centre.. INSOL Europe suggests another, less drastic solution.” (commentary to Ch. V) “INSOL Europe suggests that the court which has jurisdiction under Article 3(2) has discretionary powers to appraise the need for secondary proceedings…” (commentary to art.27) Coordination between multiple proceedings

7. Ultimate EU parent Ultimate EU parent EU subsidiary EU subsidiary EU subsidiary EU subsidiary EU sub- subsidiary EU sub- subsidiary EU sub- subsidiary EU sub- subsidiary Dr. Irit Mevorach Substantive consolidation

8. Concluding remarks…

9. Insolvency of groups of companies Michael Thierhoff Thierhoff Müller & Partner Leipzig

10. Contents 1.The Collins & Aikman case 2.Coordination 3.Consolidation

11. 1. The Collins & Aikman case - The facts - Structure of the C&A group: 24 legal entities spread over 10 countries more than 4,300 employees specialized subsidiaries with vital inter company trading central clearing function for group-wide cash management

12. 1. The Collins & Aikman case € - The story - STAR Co. average creditor days ~ 90 days Dividend: 66.8 % Cash pool (Luxembourg) DOG Co. average creditor days ~ 20 days Dividend: 100% plus interest €

13. 2. Coordination If it is one ship there should be one pilot only. Does it work? Old bulls and teamwork? What help is a secondary and for whom?

14. 3. Consolidation Substantive consolidation is contemplated when assets or liabilities of group members are intermingled. Does that include a cash-pool well accounted for? The common pratice of group-wide cash management de facto represents one type of substantive consolidation in life, before death.

15. Questions from the floor

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17. Coffee