The European Commission has adopted a complete ‘insolvency package’. There is a lot to read: the proposal to revise Regulation 1346/2000, the Report on the application of that Regulation, an Impact Assessment and a Communication on a new European approach on business failure and insolvency.
The EC’s own summary of its proposal to amend the insolvency Regulation reads as follows:
‘The elements of the proposed reform of the Insolvency Regulation can be summarised as follows:
• Scope: The proposal extends the scope of the Regulation by revising the definition of insolvency proceedings to include hybrid and pre-insolvency proceedings as well as debt discharge proceedings and other insolvency proceedings for natural persons which currently do not fit the definition;
• Jurisdiction: The proposal clarifies the jurisdiction rules and improves the procedural framework for determining jurisdiction;
• Secondary proceedings: the proposal provides for a more efficient administration of insolvency proceedings by enabling the court to refuse the opening of secondary proceedings if this is not necessary to protect the interests of local creditors, by abolishing the requirement that secondary proceedings must be winding-up proceedings and by improving the cooperation between main and secondary proceedings, in particular by extending the cooperation requirements to the courts involved;
• Publicity of proceedings and lodging of claims: The proposal requires Member States to publish the relevant court decisions in cross-border insolvency cases in a publicly accessible electronic register and provides for the interconnection of national insolvency registers. It also introduces standard forms for the lodging of claims;
• Groups of companies: The proposal provides for a coordination of the insolvency proceedings concerning different members of the same group of companies by obliging the liquidators and courts involved in the different main proceedings to cooperate and communicate with each other; in addition, it gives the liquidators involved in such proceedings the procedural tools to request a stay of the respective other proceedings and to propose a rescue plan for the members of the group subject to insolvency proceedings.’
On secondary proceedings of course, the ECJ recently issued its judgment in Bank Handlowy, which I shall review in a future post. The judgment underscores some of the very points now addressed in the Commission proposal.
The report on the application of the Regulation, and the various studies which supported it (inter alia the Hess/Oberhammer/Pfeiffer, Study for an evaluation of Regulation (EC) No 1346/2000 on Insolvency
Proceedings) are a treasure trove for analysis of the working of the Regulation in practice. Having eagerly awaited its publication, I cannot yet claim to have actually digested it yet.
The Proposal tinkers inter alia with the COMI definition (Centre of Main Interests: the jurisdictional trigger for the Regulation); and includes several proposals to address the restructuring trend in many Member States. Parliament and Council of course now need to add their own insights, however it is not unlikely, I feel, that they will subscribe to many of the EC’s suggestions.