COMIng to terms? Time to rethink the COMI standard in European Insolvency Law

The centre of main interests (or COMI) is the cornerstone of international insolvency law. Under the recast European Insolvency Regulation (the EIR), COMI determines which court has jurisdiction to open main insolvency proceedings, which law governs those proceedings, and how decisions are recognised across EU Member States. It is the single most consequential concept in European insolvency law. And yet, after more than twenty years of application there are compelling reasons to conclude that it is no longer fit for purpose, particularly concerning multinational groups of companies. With the first comprehensive review of the EIR scheduled for 27 June 2027, time has come to revisit the COMI standard; particularly in the context of group insolvencies.

The Promise and Failure of COMI

The EIR is built on modified universalism: for each debtor, one main jurisdiction is identified where proceedings with universal scope are opened, supplemented by local secondary proceedings in Member States where ‘establishments exist’. COMI identifies that main jurisdiction. For corporate debtors, COMI is presumed to lie at the registered office, absent proof to the contrary.

This design serves two objectives, which exist in tension. The first is predictability: creditors need to know which insolvency regime will apply. The EIR’s registered office mechanism aims to provide such predictability. The presumption therefore can only be rebutted with objective, third-party-verifiable criteria. That is particularly relevant as the COMI-location also determines the law that governs the proceedings’ main aspects. Take, for instance, the position of shareholders in bankruptcy proceedings: under the German Insolvenzordnung, shareholder claims are subordinated by law, whilst under the Dutch Faillissementswet absent other arrangements shareholder claims are treated as general unsecured creditors. (Perceived) changes in forum can change the (expected) lex fori concursus, profoundly impacting creditor recoveries and thus leading to upfront uncertainty. 

The second objective is sufficient flexibility. Proceedings should be opened at the debtor’s genuine centre, a location that may change during a company’s lifetime. A rigid registered office-rule may produce illogical outcomes and be open to abuse: create a company in Member State 1 which has shareholder friendly insolvency regime and move business to Member State 2. The registered-office presumption has therefore been made rebuttable. 

COMI however does not deliver on either objective particularly well. On predictability, as McCormack observed already in 2009, there is 'fairly general agreement about the fuzziness and fact sensitivity of COMI'. COMI is only definitively established when the insolvency petition is filed. Prior to filing, genuine uncertainty can exist where the COMI of a particular debtor is located, particularly for holding or financing companies. Creditors may also perceive COMI differently: a bondholder may rely on prospectus disclosures, while a trade creditor or tax authority may not have reviewed that information at all. COMI migration compounds the challenge: debtors can shift their COMI before filing, and while the EIR contains safeguards, such shifts remain possible and are not prohibited. 

COMI also creates difficulties on the flexibility-end of the spectrum, particularly for multinational groups. The CJEU requires COMI to be determined separately for each group company, with (very) limited weight given to group membership. When a European group becomes insolvent, this typically means separate proceedings in each Member State, before separate courts, with separate insolvency practitioners. Such fragmentation can be value destructive, especially where debtors operate an integrated business. It is telling that in larger restructurings, practitioners increasingly resort to procedures falling entirely outside the European insolvency framework to centralize group restructurings in a single jurisdiction, such as the English scheme of arrangement or the Dutch private WHOA. That should be a clear signal to European legislature that the current COMI mechanism has significant shortcomings.

The Commitment Rule Proposal

Professors Casey, Gurrea-Martinez, and Rasmussen recently advocated replacing COMI in the UNCITRAL framework with the ‘Commitment Rule’, under which a debtor could upfront liberally designate the State in which insolvency proceedings would be opened in its articles of incorporation. Their Commitment Rule would enhance predictability, reduce jurisdictional litigation costs, and let debtors select the most efficient insolvency regime. As such, their proposal defers praise. 

The Commitment Rule is however unlikely to gain traction within the EU anytime soon. Despite the recent European push for harmonization with the the 2019 EU Restructuring Directive and 2026 Harmonisation Directive, rankings of creditors still differ substantially between Member States. Creditor hierarchies reflect political, social, and cultural choices: protection of employees, priority of tax claims, position of secured and unsecured creditors. So long as these rankings differ significantly and applicable law automatically follows the insolvency forum under the lex fori concursus rule, allowing parties to freely choose their insolvency jurisdiction would effectively allow them to subvert their ‘home State’s policy choices underlying creditor ranking. Member States may find that difficult to accept. 

An Alternative: The Anchor Law-Rule

As a European alternative, I recently introduced the concept of the ‘Anchor Law’. In short, debtors would be free to choose in which Member State they open proceedings at the time of opening, subject to the condition that no creditor is worse off than they would be under the insolvency law of the debtor's registered office (the ‘home jurisdiction’). Creditors should receive at least the same treatment they would receive in case of the proceedings in the home jurisdiction, requiring synthetic application of that jurisdiction’s ranking and treatment of creditors as a benchmark.

The Anchor Law-rule has several advantages. First, it leads to increased predictability for creditors. They know that creditor rankings in principle will not unexpectedly shift in the months or days prior to the insolvency proceedings. The creditors' positions would be ‘anchored’ in the home jurisdiction’s law. Second, it provides flexibility, by permitting ‘good forum shopping’ (ie, choosing the most efficient forum to increase creditor recoveries), while preventing ‘bad forum shopping’ (ie, changing forum to alter creditor rankings to favour certain parties). Third, groups of companies could centralize restructurings in a single or several jurisdictions within the European framework rather than resorting to workarounds, maximizing creditor recoveries in group insolvencies.

A consideration against the Anchor Law-rule could be that Member States’ courts would need to apply foreign rankings when assessing creditor recoveries. This challenge, however, is already embedded in the EIR: under Article 36, any insolvency practitioner can prevent secondary proceedings by undertaking to respect the distribution rights creditors would have enjoyed under the law of that other Member State. The Anchor Law-rule merely extends this existing logic to the broader context of the EIR. Particularly where no liquidator is appointed, but the proceedings merely relate to the ‘digital distribution’ of value through restructuring plans, that logic holds. 

Conclusion

After more than two decades, the COMI standard has proven neither sufficiently predictable nor sufficiently flexible. The Anchor Law-rule proposed in this article offers a reformed mechanism that combines genuine predictability with controlled flexibility: freedom for debtors to choose the most efficient insolvency forum, constrained by the guarantee that no creditor ends up worse off. It facilitates good forum shopping, prevents bad forum shopping, and would be particularly welcome news for insolvent groups of companies. 

This post draws on the author's PhD dissertation on ‘Group Restructurings under the European Insolvency Regulation (recast)’, since published by Wolters Kluwer, and a more extensive article published in Tijdschrift voor Insolventierecht (2026/2).

Sid Pepels is a partner at Jones Day’s Amsterdam Office and a fellow at the Business & Law Research Centre of Radboud University. The views expressed in this post are solely those of the author and should not be attributed to Jones Day or its clients.