Answer ... Luxembourg courts generally hold that courts in the jurisdiction of the principal establishment of a company (outside the scope of the EU Insolvency Regulation, for which the centre of main interest is the criterion on which the insolvency court’s jurisdiction is based) have jurisdiction to decide on matters of insolvency regarding that company. In Luxembourg, there is no recognition of jurisdiction based on the location of a company’s assets or any other connection with another jurisdiction. As per the EU Insolvency Regulation, a foreign debtor whose centre of main interest is located in Luxembourg may enter into restructuring or bankruptcy proceedings in Luxembourg.

Answer ... Insolvency proceedings that fall within the scope of the EU Insolvency Regulation will be automatically recognised and enforced in Luxembourg without further review of the substantive matters adjudicated thereby or re-examination of the merits of the case. However, save for cooperation duties in the context of European insolvency proceedings, there is no duty for the commercial court or the appointed receiver to cooperate or consult with foreign courts and officers in case of cross-border insolvency proceedings. In practice, however, Luxembourg insolvency practitioners and courts are usually constructive and communicate well with foreign courts and professionals in a cross-border context.

Luxembourg private international law recognises the principle of universality and unicity of insolvency proceedings. Luxembourg courts therefore often do recognise foreign insolvency proceedings. Recognition will be granted without the need for any further orders of enforcement of the award if the foreign proceedings do not conflict with any domestic proceedings and the following conditions are met:

• a judgment by a competent court;
• observation of due process;
• application of the appropriate Luxembourg conflict of law rules by the foreign court;
• a judgment that does not contravene Luxembourg public policy; and
• the extraterritorial scope of the foreign insolvency law.

Furthermore, Luxembourg courts generally hold that the courts at the location of the principal establishment of the company have jurisdiction to decide on matters of insolvency regarding that company.

Luxembourg case law generally states that there can only be one single insolvency proceeding; however, under the EU Insolvency Regulation, secondary proceedings can be opened in any member state.

Answer ... The commercial court or the receiver has no obligations to coordinate or work together with foreign courts or officers, other than those under the EU Insolvency Regulation. In practice, however, Luxembourg insolvency practitioners and courts are usually constructive and communicate well with foreign courts and professionals in a cross-border context.

Answer ... Luxembourg generally does not recognise the concept of a corporate group for purposes of insolvency proceedings and treats each company as a separate legal entity distinct from its parent and subsidiaries. Therefore, a debtor can be put into bankruptcy or become insolvent without necessarily affecting any of its affiliates. In practice, however, there will often be some form of cooperation between the receiver appointed in Luxembourg and any foreign insolvency officers appointed for other group companies.

In exceptional circumstances, the corporate veil may be pierced by a Luxembourg court where the managers/directors or shareholders disregarded the separate legal personality of the company; in such case the court may disregard the individual legal personality of such company in order to sanction the shareholders or managers/directors at fault.

Answer ... Luxembourg courts apply the EU Insolvency Regulation’s presumption that the centre of main interest of a debtor corresponds to its registered office (as well as any rebuttals under the regulation), and will apply the factual criteria specified therein.

Answer ... No distinction is made in Luxembourg restructuring and insolvency proceedings between domestic and foreign creditors. However, it is unclear whether super-privileged creditor status will extend to a foreign equivalent.