Comparative Analysis of Grounds for the Commencement of Insolvency Proceedings

Abstract

This article is called comparative analysis of grounds for the commencement of Insolvency Proceedings. The problematic issue that was raised is the following one – is it necessary to harmonize grounds for the commencement of insolvency proceedings within the EU? Author outlines and examines two basic grounds for the commencement of insolvency proceedings: cash-flow and balance sheet insolvency tests, their interpretation and application under English, German and Lithuanian laws. Comparative analysis of these laws has showed that each country specifies and understands concepts of cash-flow and balance sheet insolvencies in the different manners, applying different indicators for their determination. Taking into account gained results, it is desirable and advisable to harmonize grounds for the commencement of insolvency proceedings within the EU in order to facilitate economic and investment climates in its Member States.

Keywords

• insolvency
• European Union
• insolvency proceedings
• cash-flow insolvency
• balance sheet insolvency
• harmonization