In order to petition for bankruptcy in England, an individual’s «centre of main interests» (Comi) must be based there.
H owever, some insight was provided by a decision of the English court in a 2007 case involving a German doctor who was made bankrupt in England. T he doctor moved to England to work on a temporary basis as a locum. A ll of his creditors were based in Germany, as was his wife.
E nglish bankruptcy officials believed that his Comi was in Germany, and argued that the individual had only moved to England in 2006 and was living in temporary accommodation. N evertheless the judge found that the doctor was entitled to change his Comi from Germany to England, and that it was irrelevant that his debts were in Germany. He also pointed out that there is no minimum period that a person must spend in a member state before it becomes their Comi.
On the basis of this ruling, heavily indebted Irish individuals are being advised to consider setting up residence in England before applying to the court to become bankrupt there.
A bankruptcy period of one year also applies in Northern Ireland, and for logistical reasons this is likely to be an even more attractive location in which to pursue this strategy. The same logic would apply in relation to Northern Ireland, but the key difference is that the issue has not yet been tested in court there.
The UK bankruptcy law was changed in May 2000, effective May 29, 2000. Debtors may now retain occupational pensions while in bankruptcy, except in rare cases.
Conclusion
The role of bankruptcy as a means of exerting pressure on corporations' CEOs in a market economy is wellknown and has been described in all of its aspects (both positive and negative) in the vast literature existing on this subject. The threat of a corporation’s bankruptcy as a result of its CEOs' erroneous policy on the markets (and as the extreme variant — the taking of control by its creditors) is usually regarded as the most important external instrument of corporate governance. An obvious expected result of applying this mechanism (irrespective of the faults and merits of specific countrybased models — be they procreditor or pro debtor) must the rehabilitation of finances and improved efficiency of a corporation which has been subjected to such procedures. National legislation on bankruptcy is oriented towards a developed market economy, where the percentage of the economic subjects in respect to which it might be necessary to apply bankruptcy procedures is relatively small.
Bibliography
Dmitrii Arefiev. O Federal’nom zakone «O nesostoiatel’nosti (bankrotstve) (On the Federal Law «On insolvency (bankruptcy)» (new version). Posted at www.bpi.ru.
Burmistrova T., Karelin A. Bankrotstva v sovremennoi Rossii. Resul’taty i praktika primeneniia (Bankruptcies in contemporary Russia. Results and practice of their application.) — Pravo i ekonomika, 2009, No. 3.
Halliday T. C, «Professionals in systemic reform of bankruptcy laws: the 1978 U.S. Bankruptcy Code and the English Insolvency Act 1986,» Am. Bankr. Law J. 74:1(2009): 35−75.
Popondopulo V.F. Novelly Zakona «O nesostoiatel’nosti (bankrotstve) (Kratkii kommentarii glav I, II, XII). (Innovations in the Law «On in solvency (bankruptcy)» (A brief commentary to Chapters I, II, XII). — Iur ist i bukhgalter 2008, No. 4, p. 81.
The institution of bankruptcy: development, problems, areas of reforming. Π.: IET, 2009. P. 281
Dmitrii Arefiev. O Federal’nom zakone «O nesostoiatel’nosti (bankrotstve) (On the Federal Law «On insolvency (bankruptcy)» (new version). Posted at www.bpi.ru.
Burmistrova T., Karelin A. Bankrotstva v sovremennoi Rossii. Resul’taty i praktika primeneniia (Bankruptcies in contemporary Russia. Results and practice of their application.) — Pravo i ekonomika, 2009, No. 3.
The institution of bankruptcy: development, problems, areas of reforming. Π.: IET, 2009. P. 281
Halliday T. C, «Professionals in systemic reform of bankruptcy laws: the 1978 U.S. Bankruptcy Code and the English Insolvency Act 1986,» Am. Bankr. Law J. 74:1(2009): 35−75.
