EInsolvency law is an essential pillar of any legal system. Its raison d'être lies in the need to establish a regulatory framework applicable to companies or individuals experiencing difficulties that prevent them from duly meeting their obligations.

Traditionally, this area has been associated with procedures aimed at maximising the value of the assets of non-viable businesses in order to repay creditors the highest percentage of their claims in accordance with a legally prescribed order of priority. However, over the last few decades there has been a growing awareness that debtors may experience financial or operational difficulties which, if overcome, would allow them to continue with economically viable activities. Thus, alternative ways of dealing with insolvencies have emerged, such as restructuring procedures, which offer a structured framework under which part or all of the debt may be renegotiated.

In addition to this new paradigm, the current legal landscape has to face the challenges posed by transnational insolvencies, which arise, for example, when creditors are domiciled/reside in other jurisdictions or assets are spread across different countries, meaning that debtors are potentially subject to a plurality of insolvency regimes, with the uncertainty that this entails. In this regard, the Members States of the European Union, aware of the complexity involved in harmonising the various national rules, opted to establish a common set of rules of private international law.

However, this solution is insufficient to deal with the complexity of international insolvencies and the new procedures that have been emerging, so, in 2011, a process of substantive harmonisation of European Insolvency Law was initiated, which is being carried out through Directives. This means that the private international insolvency law regime continues to play a key role, as Member States have a certain discretion in transposing the Directives.

In practice, there are significant disparities and even incompatibilities between the two regimes, which have led several Member States to evade the application of the European Private International Insolvency Law regime.

Therefore, this project aims to identify all points of incompatibility, conflict and gaps between the above-mentioned rules and to offer solutions to them. It also aims to anticipate future challenges that may arise with the evolution of the European legal framework, to avoid further mistakes and to promote a coherent and effective European Insolvency Law.