DENMARK Law and Practice Contributed by: Henrik Sjørslev, Peter H. Knudsen, Henrik Lund-Koefoed and Levent Kitir, DLA Piper Denmark
6. Cross-Border Issues in Insolvency 6.1 Sources of International Insolvency Law Denmark is, due to its reservation from judicial co- operation in the EU, not part of or bound by the EU Regulation on Insolvency Proceedings; consequently, there is no general statutory framework in place with regard to the recognition of foreign insolvency pro - ceedings. However, by virtue of the Nordic Bankruptcy Treaty, Denmark does recognise bankruptcy proceedings in the Nordic countries. Within the financial area, Denmark has implemented the EU rules regarding recognition of insolvency pro - ceedings in another EU member state (among these are the BRRD and the BRRD II). These rules are imple - mented according to EU rules concerning the internal market and not judicial co-operation. In the future, more EU Directives are expected to be enacted under the EU rules regarding the internal market. Under the Danish Bankruptcy Act, the Minister of Jus - tice is authorised to lay down regulations pursuant to which decisions by foreign courts of law and authori - ties in respect of bankruptcy, restructuring and other similar insolvency proceedings have binding effect and are enforceable in Denmark. The Minister has not exercised this authority, though this does not neces - sarily mean that foreign insolvency proceedings can never be, or have never been, recognised in Denmark. However, Danish insolvency courts have entered into singular agreements/protocols with foreign insolven - cy courts on a case-by-case basis when there was a need to do so. 6.2 Jurisdiction According to the Danish Insolvency Act, the debtor’s bankruptcy venue ( konkursværneting ) follows the rules on venue (v ærneting ) in the Danish Administration of Justice Act. The principle of centre of main interests (COMI) applies in relation to venues for businesses. 6.3 Applicable Law Danish private international law stipulates the laws by which a contract is governed. Danish insolvency law
defining characteristic of insolvency under Danish law, irrespective of its high value in determining insolvency. Please also see 1.2 Types of Insolvency and 4.1 Opening Statutory Restructuring, Rehabilitation and Reorganisation . 5.2 Course of the Liquidation Procedure The Danish Bankruptcy Act contains rules allow - ing creditors to form a creditors’ committee during a bankruptcy process; however, this happens very rarely. Please see 1.2 Types of Insolvency , 1.3 Statutory Officers , 2.4 Unsecured Creditors , and 4.4 The Posi- tion of a Debtor in Restructuring, Rehabilitation and Reorganisation for further details. 5.3 The End of the Liquidation Procedure(s) Bankruptcy procedures can end in various ways: • provided that no more funds are present to cover further costs associated with the administration of the estate, the bankruptcy proceedings may end unless a creditor provides security for the costs related to the trustee’s further administration of the bankruptcy estate; • if sufficient funds are present, the bankruptcy pro - ceedings will end once all assets have been liqui - dated, all other aspects are cleared and a dividend can be distributed to the eligible creditors; or • if the debtors – after the expiration of the period for lodging claims – present consent from all creditors or proof that they have been paid in full, the bank - ruptcy proceedings will end immediately. However, this happens rarely. The trustee will prepare accounts for the bankruptcy estate’s payments and receipts upon the termination of the bankruptcy proceedings, including the fee of the trustee subject to approval from the bankruptcy court. 5.4 The Position of Shareholders and Creditors in Liquidation Please see 2.3 Secured Creditors and 2.4 Unsecured Creditors for further details of the position of share - holders and creditors in liquidation.
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