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Litigation Win in English High Court Sets New Guidance for Interpretation of EC Insolvency Regulation

In a significant litigation win, global law firm Weil, Gotshal & Manges secured for its client, the liquidator of Office Metro Ltd., dismissal of a secondary insolvency proceedings in a case before the English High Court that also sets forth guidance for establishing jurisdiction under the EC Insolvency Regulation (Council Regulation EC No. 1346/2000) (EIR).

In the case, Trillium (Nelson) Properties v. Office Metro Limited, Trillium attempted to open secondary insolvency proceedings against Office Metro in the English High Court. Our client, Yann Baden, a Luxembourg trustee in bankruptcy (“curateur”), opposed the petition on the ground that Office Metro’s operations in England did not constitute an “establishment” to satisfy jurisdiction under the EIR at the time the petition was filed, and that, if allowed, the additional proceedings would only duplicate expense, costs and investigations to the detriment and diminishment of Office Metro’s insolvent estate.

The High Court ruled in favor of the curateur and Office Metro and concluded that, because the scope of Office Metro’s operations in the United Kingdom did not amount to economic activity, Office Metro was not an establishment within the meaning of the EIR so that the English courts did not have jurisdiction to open a secondary insolvency proceeding.

This marks the first time the English High Court has ruled on key aspects of the interpretation and application of the EIR concerning secondary proceedings. The ruling is discussed in detail in a posting on Weil’s Bankruptcy Blog.

Weil’s team on the matter included Restructuring partner Paul Bromfield and associates Andrew Fox, William Needham and Sally Willcock, and trainee Ellie Marques.

Legalese