Received: 30 October 2019 Revised: 31 March 2020 DOI: 10.1002/iir.1370 RESEARCH ARTICLE Conflicts of interest, intra-group financing and procedural coordination of group insolvencies Ilya Kokorin Department of Financial Law, Leiden University, Leiden Correspondence Ilya Kokorin, Department of Financial Abstract Law, Leiden University, Leiden, The Modern insolvency law instruments recognise the spec- Netherlands. ificity of enterprise group insolvencies, premised on the Email:
[email protected] existence of close operational and financial links between group members. It is widely accepted that maximisation of insolvency estate value and procedural efficiency depend on coordination of insolvency pro- ceedings opened with respect to group entities. Such coordination is prescribed in the European Insolvency Regulation (recast), the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Enterprise Group Insolvency and the recently reformed German insolvency law. Yet in insolvency, group mem- bers retain their own insolvency estates and pools of creditors. This is based on the traditional company law principle of entity shielding. Active communication and cooperation between insolvency practitioners and courts do not sit well with the separate (atomistic) nature of insolvency proceedings, as well as different and oftentimes conflicting interests of creditors in such proceedings. As a result, communication and coopera- tion may be restricted in a situation of conflicts of inter- est. This article explores how in the context of group distress the risks arising from conflicts of interest can be controlled and mitigated, while ensuring efficient This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.