RANKING AND PRIORITY OF CREDITORS Edited by DENNIS FABER Business & Law Research Centre ofthe Radboud University Nijmegen; Clifford Chance LLP (Amsterdam) NIELS VERMUNT Business & Law Research Centre ofthe Radboud University Nijmegen; Linklaters LLP (Amsterdam) JASON KILBORN Business & Law Research Centre ofthe Radboud University Nijmegen; John Marshall Law School (Chicagoj TOMAS RICHTER Clifford Chance LLP (Prague); Charles University, Prague IGNACIO TIRADO UniversidadAutonoma of Madrid Business Researcl Law e n t r e OXFORD UNIVERSITY PRESS
CONTENTS Table ofcases Table oflegislation List of Contributors xxix xliii lxvii 1. National Report for Australia Christopher Symes I. Introduction 1.01 II. Insolvency Claims 1.07 A. Definition and scope 1.07 1. Bankruptcy 1.07 2. Liquidation 1.09 3. Voluntary administration 1.11 of insolvency claims 1.12 1. General remarks 1.12 2. Submission of claims 1.25 3. Verification and admission of claims 1.60 C. Ranking of insolvency claims 1.82 1. Bankruptcy 1.82 2. Liquidation 1.90 3. Voluntary administration 1.104 D. Voting and other participation rights 1.108 1. Bankruptcy 1.108 2. Liquidation 1.113 3. Voluntary administration 1.117 III. Administration Claims 1.120 A. Definition and scope 1.120 1. Bankruptcy 1.120 2. Liquidation 1.121 3. Voluntary administration 1.122 of administration claims 1.123 1. Bankruptcy 1.123 2. Liquidation 1.132 3. Voluntary administration 1.140 C. Ranking of administration claims 1.144 1. Bankruptcy 1.144 2. Liquidation 1.148 3. Voluntary administration 1.157 xvii
D. Voting and other participation rights 1.159 1. Bankruptcy 1.159 2. Liquidation 1.160 3. Voluntary administration 1.161 IV. Non-enforceable Claims 1.162 A. Definition and scope 1.162 1. Bankruptcy 1.163 2. Liquidation 1.168 3. Voluntary administration 1.172 B. Treatment of non-enforceable claims 1.173 1. Bankruptcy 1.173 2. Liquidation 1.174 3. Voluntary administration 1.176 2. National Report for Austria Henriette Duursma-Kepplinger and Christof Englmair I. Introduction 2.01 II. Insolvency Claims 2.07 A. Definition and scope 2.07 1. Delimitation in temporal terms 2.09 2. Delimitation in material terms 2.12 3. Sub-categories of insolvency claims definidons 2.14 of claims 2.47 1. Valuation of claims 2.47 2. Submission of claims 2.51 3. Verification and admission of claims 2.78 C. Ranking of insolvency claims 2.87 D. Voting and other participation rights 2.89 1. Voting 2.90 2. Participation in the distributions 2.97 3. Rights after insolvency annulment 2.112 III. Administration Claims 2.123 A. Definition and scope 2.123 B. Classification and ranking of asset claims 2.136 C. Satisfaction of the asset claims 2.138 1. In general 2.138 2. In deficiency 2.144 3. Subsequent liability of the debtor for asset claims 2.158 IV. Non-enforceable Claims 2.160 3. National Report for Belgium Roel Fransis I. Introduction 3 01 xviii
II. Insolvency Claims 3.04 A. Definition and scope 3.04 of insolvency claims 3.06 1. General remarks 3.06 2. Submission of claims 3.18 3. Verification and admission of claims 3.29 C. Ranking of insolvency claims 3.33 D. Voting and other participation rights 3.40 III. Administration Claims 3.44 A. Definition and scope 3.44 of administration claims 3.49 C. Ranking of administration claims 3.55 D. Voting and other participation rights 3.58 IV. Non-enforceable Claims 3.59 A. Definition and scope 3.59 B. Treatment of non-enforceable claims 3.64 4. National Report for Brazil Rachel Sztajn, Paulo Fernando Campos Salles de Toledo, and Fernando Cesar Nimer Moreira da Silva I. Introduction 4.01 II. Insolvency Claims 4.05 A. Definition and scope 4.05 of insolvency claims 4.17 1. General remarks 4.17 C. Submission, verification, and admission of claims 4.24 D. Ranking of insolvency claims 4.32 E. Voting and other participation rights 4.46 III. Administration Claims 4.54 A. Definition and scope 4.54 of administration claims 4.59 C. Ranking of administration claims 4.67 D. Voting and other participation rights 4.75 IV. Non-enforceable Claims 4.79 A. Definition and scope 4.79 B. Treatment of non-enforceable claims 4.89 5. National Report for Canada E Patrick Shea I. Introduction 5.01 xix
Insolvency Claims 5.06 A. Definition and scope 5.06 of insolvency claims 5.15 1. General remarks 5.15 2. Submission of claims 5.33 3. Verification and admission of claims 5.50 C. Ranking of insolvency claims 5.59 D. Voting and other participation rights 5.83 Administration Claims 5.101 A. Definition and scope 5.101 of administration claims 5.105 C. Ranking of administration claims 5.110 D. Voting and other participation rights 5.113 Non-enforceable Claims 5.114 A. Definition and scope 5.114 B. Treatment of non-enforceable claims 5.121 6. National Report for the People's Republic of China Wang Weiguo I. Introduction 6.01 II. Insolvency Claims 6.03 A. Definition and scope 6.03 of insolvency claims 6.06 1. General remarks 6.06 2. Submission of claims 6.12 3. Verification and admission of claims 6.29 C. Ranking of insolvency claims 6.40 D. Voting and other participation rights 6.47 III. Administration Claims 6.56 A. Definition and scope 6.56 of administration claims 6.61 C. Ranking of administration claims 6.69 D. Voting and other participation rights 6.74 IV. Non-enforceable Claims 6.75 A. Definition and scope 6.75 B. Treatment of non-enforceable claims 6.76 7. National Report for the Czech Republic Tomds Richter I. Introduction 7.01 xx
II. Insolvency Claims 7.06 A. Definition and scope 7.06 of insolvency claims 7.18 1. General remarks 7.18 2. Submission of claims 7.23 3. Verification and admission of claims 7.35 C. Ranking of insolvency claims 7.46 D. Voting and other participation rights 7.52 III. Administration Claims 7.61 A. Definition and scope 7.61 of administration claims 7.67 C. Ranking of administration claims 7.74 D. Voting and other participation rights 7.78 IV. Non-enforceable Claims 7.79 A. Definition and scope 7.79 B. Treatment of non-enforceable claims 7.80 8. National Report for England Hamish Anderson, Charlotte Cooke, and Louise Gullifer I. Introduction 8.01 II. Insolvency Claims 8.11 A. Definition and scope 8.11 of insolvency claims 8.26 1. General remarks 8.26 2. Submission of claims 8.33 3. Verification and admission of claims 8.47 C. Ranking of insolvency claims 8.51 1. The paripassu principle 8.51 2. Insolvency set-off 8.55 3. Claims payable in priority to provable debts 8.56 4. Claims payable out of floating charge assets 8.57 5. Interest on provable debts 8.68 6. Statutorily deferred claims 8.69 7. Non-provable debts 8.76 8. Distribution to shareholders 8.77 9. Subordination agreements 8.78 D. Voting and other participation rights 8.82 III. Administration Claims 8.86 A. Definition and scope 8.86 1. Costa associated with the commencement of an insolvency proceeding 8.96 2. The application of the salvage principle 8.97 xxi
of administration claims 8.98 C. Ranking of administration claims 8.101 1. Order of priority of expenses 8.101 2. The payment of expenses out of floating charge assets 8.105 D. Voting and other participation rights 8.109 IV. Non-enforceable Claims 8.110 A. Definition and scope 8.110 B. Treatment of non-enforceable claims 8.115 9. National Report for France Gilles Cuniberti and Isabelle Rueda I. Introduction 9.01 II. Insolvency Claims 9.03 A. Definition and scope 9.03 of insolvency claims 9.04 1. General remarks 9.04 2. Submission of claims 9.10 3. Verification and admission of claims 9.19 C. Ranking of insolvency claims 9.25 D. Voting and other participation rights 9.36 III. Administration Claims 9.39 A. Definition and scope 9.39 of administration claims 9.41 C. Ranking of administration claims 9.47 D. Voting and other participation rights 9.48 IV. Non-enforceable Claims 9.49 A. Definition and scope 9.49 B. Treatment of non-enforceable claims 9.50 10. National Report for Germany Christoph G Paulus and Matthias Berberich I. Introduction 10.01 II. Insolvency Claims 10.08 A. Definition and scope 10.08 of insolvency claims 10.13 1. General remarks 10.13 2. Submission of claims 10.19 3. Verification and admission of claims 10.31 C. Ranking of insolvency claims 10.44 1. Unsecured/non-preferential insolvency claims 10.44 xxii
2. Secured insolvency claims 10.45 3. Preferential insolvency claims 10.49 4. Subordinated claims 10.53 D. Voting and other participation rights 10.75 1. Votes in the creditors' meeting 10.76 2. Votes in the creditors' committee and other means of influence 10.83 III. Administration Claims 10.85 A. Definition and scope 10.85 of administration claims 10.91 C. Ranking of administration claims 10.97 D. Voting and other participation rights 10.100 IV. Non-enforceable Claims 10.101 11. National Report for Mexico Carlos Sdnchez-Mejorada y Velasco I. Introduction 11.01 II. Insolvency Claims 11.04 A. Definition and scope 11.04 1. Definition 11.04 2. Scope 11.05 of insolvency claims 11.06 1. General remarks 11.06 2. Submission of claims 11.18 3. Verification and admission of claims 11.29 C. Ranking of insolvency claims 11.34 1. Claims against the estate 11.38 2. Tax claims 11.39 3. Singularly privileged creditors 11.42 4. Creditors with an in rem security 11.43 5. Creditors with a special privilege 11.49 6. Common or ordinary creditors 11.51 7. Subordinated claims 11.52 8. Equity holders 11.53 9. Other 11.54 D. Voting and other participation rights 11.55 III. Administration Claims 11.68 A. Definition and scope 11.68 of administration claims 11.69 C. Ranking of administration claims 11.76 D. Voting and other participation rights 11.77 xxiii
IV. Non-enforceable Claims 11.78 A. Definition and scope 11.78 B. Treatment of non-enforceable claims 11.82 12. National Report for the Netherlands Dennis Faber and Niels Vermunt I. Introduction 12.01 II. Insolvency Claims 12.06 A. Definition and scope 12.06 1. Bankruptcy 12.06 2. Suspension of payments 12.09 of insolvency claims 12.10 1. General remarks 12.10 2. Submission of claims 12.19 3. Verification and admission of claims 12.48 C. Ranking of insolvency claims 12.63 D. Voting and other participation rights 12.76 1. Creditor meetings 12.76 2. Voting on a composition plan 12.78 3. Other participation rights 12.81 III. Administration Claims 12.84 A. Definition and scope 12.84 of administration claims 12.89 C. Ranking of administration claims 12.99 D. Voting and other participation rights 12.104 IV. Non-enforceable Claims 12.105 A. Definition and scope 12.105 B. Treatment of non-enforceable claims 12.109 13. National Report for Poland Marek Porzycki and Anna Rachwal I. Introduction 13.01 II. Insolvency Claims 13.07 A. Definition and scope 13.07 of insolvency claims 13.11 1. General remarks 13.11 2. Secured creditors 13.17 3. Existence of claims after the termination of proceedings 13.19 4. Trading of claims 13.24 5. Submission of claims 13.29 6. Verification and admission of claims 13.47 xxiv
C. Ranking of insolvency claims 13.57 1. General remarks 13-57 2. Priority claims 13.63 3. Priority disputes 13.71 4. Subordinated claims 13.72 5. Ranking agreements, contractual subordinations, and limited recourse provisions 13.74 6. Distribution rights of shareholders 13.75 D. Voting and other participation rights 13.76 III. Administration Claims 13.99 A. Definition and scope 13.99 of administration claims 13.105 C. Ranking of administration claims 13.116 D. Voting and other participation rights 13.121 IV. Non-enforceable Claims 13.122 A. Definition and scope 13.122 B. Treatment of non-enforceable claims 13.127 14. National Report for the Russian Federation Alexander Trukhtanov I. Introduction 14.01 II. Insolvency Claims 14.04 A. Definition and scope 14.04 of insolvency claims 14.15 1. General remarks 14.15 2. Submission of claims 14.25 3. Verification and admission of claims 14.39 C. Ranking of insolvency claims 14.46 D. Voting and other participation rights 14.61 III. Administration Claims 14.65 A. Definition and scope 14.65 of administration claims 14.71 C. Ranking of administration claims 14.79 D. Voting and other participation rights 14.81 IV. Non-enforceable Claims 14.82 A. Definition and scope 14.82 B. Treatment of non-enforceable claims 14.85 15. National Report for South Africa Kathleen van der Linde and Juanitta Calitz I. Introduction 15.01 xxv
II. Insolvency Claims 15.08 A. Definition and scope 15.08 1. Bankruptcy 15.08 2. Reorganization 15.11 of insolvency claims 15.12 1. General remarks 15.12 2. Submission of claims 15.27 3. Verification and admission of claims 15.41 C. Ranking of insolvency claims 15.51 1. Bankruptcy 15-51 2. Reorganization 15.67 D. Voting and other participation rights 15.71 1. Bankruptcy 15.72 2. Reorganization 15.77 III. Administration Claims 15.82 A. Definition and scope 15.82 1. Bankruptcy 15.82 2. Reorganization 15.90 of administration claims 15.93 1. Bankruptcy 15.93 2. Reorganization 15.102 C. Ranking of administration claims 15.104 1. Bankruptcy 15.104 2. Reorganization 15.106 D. Voting and other participation rights 15.108 IV. Non-enforceable Claims 15.109 A. Definition and scope 15.109 B. Treatment of non-enforceable claims 15.117 16. National Report for the Republic of Korea (South Korea) Soogeun Oh and Kyungjin Kim I. Introduction 16.01 II. Insolvency Claims 16.03 A. Definition and scope 16.03 1. Rehabilitation claims 16.03 2. Bankruptcy claims 16.15 3. Individual rehabilitation claims 16.16 of insolvency claims 16.17 1. Submission of claims 16.17 2. Verification and admission of claims 16.30 C. Ranking of insolvency claims 16.52 1. Rehabilitation claims 16.52 2. Bankruptcy claims 16.56 3. Individual rehabilitation claims 16.58 xxvi
D. Voting and other participation rights 16.60 1. Rehabilitation claims 16.60 2. Bankruptcy claims 16.62 3. Individual rehabilitation claims 16.64 III. Administration Claims 16.65 A. Definition and scope 16.65 1. Common benefit claims in rehabilitation proceedings 16.65 2. Estate claims in bankruptcy proceedings 16.91 3. Individual rehabilitation estate claims in individual rehabilitation proceedings 16.104 of administration claims 16.105 C. Ranking of administration claims 16.111 1. Common benefit claims in rehabilitation proceedings 16.111 2. Estate claims in bankruptcy proceedings 16.118 3. Individual rehabilitation estate claims in individual rehabilitation proceedings 16.119 IV. Non-enforceable Claims 16.120 A. Definition and scope 16.120 B. Treatment of non-enforceable claims 16.121 17. National Report for Spain Ignacio Tirado I. Introduction 17.01 II. Insolvency Claims 17.04 A. Definition and scope 17.04 of insolvency claims 17.10 1. General remarks 17.10 2. Submission of claims 17.16 3. Verification and admission of claims 17.26 C. Ranking of insolvency claims 17.29 D. Voting and other participation rights 17-36 III. Administration Claims 17.40 A. Definition and scope 17.40 of administration claims 17.42 C. Ranking of administration claims 17.47 D. Voting and other participation rights 17.49 IV. Non-enforceable Claims 17.50 A. Definition and scope 17.50 B. Treatment of non-enforceable claims 17.52 18. National Report for Sweden Annina H Persson and Marie Karlsson-Tuula I. Introduction 18.01 xxvii
II. Insolvency Claims 18.06 A. Definition and scope 18.06 of insolvency claims 18.08 1. General remarks 18.08 2. Submission of claims 18.25 3. Verification and admission of claims 18.41 C. Ranking of insolvency claims 18.47 D. Voting and other participation rights 18.57 III. Administration Claims 18.74 A. Definition and scope 18.74 of administrative claims 18.78 C. Ranking of administration claims 18.83 D. Voting and other participation rights 18.87 IV. Non-enforceable Claims 18.88 A. Definition and scope 18.88 B. Treatment of non-enforceable claims 18.90 19. National Report for the United States Jason Kilborn I. Introduction 19.01 II. Insolvency Claims 19.03 A. Definition and scope 19.03 of insolvency claims 19.08 1. General remarks 19.08 2. Submission of claims 19.18 3. Verification and admission of claims 19.28 C. Ranking of insolvency claims 19.32 D. Voting and other participation rights 19.42 III. Administration Claims 19.46 A. Definition and scope 19.46 of administration claims 19.50 C. Ranking of administration claims 19.54 D. Voting and other participation rights 19.58 IV. Non-enforceable Claims 19.59 A. Definition and scope 19-59 B. Treatment of non-enforceable claims 19.67 Further Reading 597 Index 607 xxviii