Party Autonomy in International Property Law - Peace Palace Library

D. Assignment; Financial Instruments; Insolvency Law
tion in the debate on whether to accept party autonomy in international
property law.
12.2. Avoidance actions
12.2.1. Introduction
Juridical acts that the debtor has performed in the period (immediately)
prior to the opening of an insolvency proceeding, including the transfer
of and creation of security rights in assets, are generally subject to special
scrutiny. Insolvency law generally provides for mechanisms to render ineffective
juridical acts performed by the debtor prior to the opening of the
insolvency proceedings and that have prejudiced the creditors. Insolvency
law under certain circumstances allows for the reversal 5 of juridical acts
that the debtor has performed to the unfair detriment of the (other) creditors.
Such actions are intended to protect the integrity of the estate and
to counter infringements on the paritas creditorum (or, rather, the statutory
ranking of creditors). This is a recognition of the fact that a debtor who
is insolvent, or on the brink of insolvency but not yet subject to formal
insolvency proceedings, may be tempted to transfer assets gratuitously or
at an undervalue, or to benefit certain creditors to the detriment of others.
The result of such actions may for example be that assets or proceeds
thereof are returned to the estate, to the extent that they would otherwise
have been available for the satisfaction of creditors’ claims, or to allow
the administrator to realise assets unencumbered: for instance, following
reversal of the creation of a security right immediately prior to the opening
of the proceeding to secure a previously unsecured claim.
The conditions under which juridical acts may be reversed differ widely
among jurisdictions: for example, with respect to requirements of proof
of collusion or awareness of the prejudice to other creditors or fraudulent
intent by the debtor. 6 Some jurisdictions in principle only allow for
5
‘Reversal’ is a term derived from the Principles of European Insolvency Law,
see W.W. McBryde et al. (eds.), Principles of European Insolvency Law, Deventer:
Kluwer, 2003.
6
Comparative surveys can be found in J.J. Forner Delaygua (ed.), La proteccion
del crédito en Europa: La acción pauliana, Barcelona: Bosch, 2000; P.R.
Wood, Principles of International Insolvency, 2 nd edition, London: Sweet &
264
P. M. Veder
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