An Ontario Court has provided guidance on determining a person's centre of main interests (COMI) for the purposes of the UNCITRAL Model Law on Cross-Border Insolvency (as implemented in New Zealand, in the Insolvency (Cross Border) Act 2006, and in Canada).
Under the Model Law, a "foreign main proceeding" is defined as a proceeding in the jurisdiction where the debtor has its COMI, with a presumption that a debtor company's COMI is where its registered office is.
The Court held that the following principal factors, considered as a whole, will indicate whether the location in which the proceeding has been filed is the debtor's COMI:
- Whether the location is "readily ascertainable by creditors"
- Whether the location is "one in which the debtor’s principal assets or operations are found"
- Whether the location is "where the management of the debtor takes place".
The "review is designed to determine that the location of the proceeding, in fact, corresponds to where the debtor’s true seat or principal place of business actually is, consistent with the expectations of those who dealt with the enterprise prior to commencement of the proceedings".
On the facts, the companies were managed in the United States as part of an integrated whole. In those circumstances, the Court concluded that the presumption was rebutted and the companies’ COMI was in the United States.
See Court decision here.