Lecture I

This first video introduces the foundations of the European Insolvency Regulation. It explains why insolvency law exists and why the European Union (EU) needed a cross-border framework. Insolvency law becomes necessary when a debtor can no longer pay its debts. Ordinary contract enforcement is not enough in these situations because multiple creditors compete for limited assets, creating a destructive “grab race.” Insolvency law replaces this with a collective process designed to preserve value, distribute the proceeds of liquidated assets fairly, and sometimes give viable businesses or individuals a fresh start.

The present discussion highlights the broader economic role of insolvency law. Modern systems are not only about liquidating failing companies, but also about restructuring viable ones to preserve jobs, know-how, supply chains and market stability. At the same time, non-viable “zombie companies” must be removed efficiently so resources can be redirected productively. Insolvency law is therefore presented as part of the economic infrastructure of a functioning market economy.

The video then explains the main types of insolvency proceedings: liquidation, restructuring, and debt discharge for natural persons. These procedures share common features, including collective creditor participation, court supervision, court-appointed insolvency practitioners, temporary stays on enforcement actions of creditors, and transparent rules for distributing assets.

From there, the focus shifts to cross-border insolvency. While trade and investment increasingly operate internationally, development of insolvency laws remains largely national. This creates legal uncertainty when companies operate across several countries. Different courts may claim jurisdiction, creditors may race to favorable forums, and proceedings may conflict with one another. In the early 2000s the European Insolvency Regulation was developed to address these coordination problems within the EU internal market.

Importantly, the Regulation does not harmonise national insolvency laws of the Member States. Instead, it creates a framework for cooperation between them. It determines which Member State’s courts have jurisdiction, which of their laws applies, whether judgments are automatically recognised EU, and how courts and insolvency practitioners should cooperate. National laws still govern the substance of insolvency law and its proceedings themselves.

The video also traces the history of the Regulation. The original EIR entered into force in 2002 and was recast (revised) in 2015 after practical shortcomings became clear. The updated framework broadened the scope to include restructuring procedures, aiming to prevent insolvency. It further strengthened safeguards against abusive forum shopping, improved cross-border cooperation mechanisms, introduced rules for insolvencies of groups of companies, and expanded transparency through interconnected insolvency registers.

Overall, the episode in Video 1 presents the European Insolvency Regulation as a coordination tool designed to support the EU internal market. Rather than replacing national insolvency systems, it creates a structured framework that allows them to function together when insolvencies cross borders.

Further Reading

– Bob Wessels and Defne Taşman, The European Insolvency Regulation: An Essential Guide (Edward Elgar Publishing forthcoming 2026) (Elgar Practical Guides)

– Reinhard Bork and Kristin van Zwieten (eds.), Commentary on The European Insolvency Regulation, Oxford University Press, 2nd ed. (2022),

– Insolvency Regulation 1346/2000: Council Regulation (EC) No 1346/2000 of 29 May 2000 on Insolvency Proceedings [2000] OJ L160/1 (EIR 2000)

– Insolvency Regulation 2015/848: Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on Insolvency Proceedings (Recast) [2015] OJ L141/19, consolidated version (6 November 2025) (EIR 2015)

– Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), [2012] OJ L 351/1, consolidated version (26 February 2015) (Brussels I bis Regulation)

– Treaty on European Union Consolidated Version of the [2016] OJ C 202/13 (TFEU)

– Treaty on the Functioning of the European Union [2016] OJ C 202/47, Consolidated Version (TFEU)

– Miguel Virgós and Etienne Schmit, Report on the Convention on Insolvency Proceedings, 1996 [EU Council of the EU Document] (Virgós-Schmidt report)