Brussels, 06/02/2014 (Agence Europe) - On Wednesday 5 February, the European Parliament approved the rules in Strasbourg that were proposed by European Commissioner for Justice, Fundamental Rights and Citizenship Viviane Reding in December 2012 on the cross-border system of business insolvency. The plenary adopted the report by Klaus-Heiner Lehne (EPP, Germany) by 580 votes to 69, with 19 abstentions. The new rules revise a regulation dating from 2000 and not only focus on business liquidation but also on the means to save viable companies while protecting the right of creditors to be paid.
The insolvency of businesses involving several countries concerns 50,000 firms every year (out of an average of 200,000 bankruptcies in total), according to European Commission figures, and 1.7 million jobs are lost as a result of these cross-border bankruptcies. The changes made by the proposal are technical - the scope of the regulation is broadened via a new definition of insolvency proceedings which includes, for example, the ideas of pre-insolvency proceedings or hybrid proceedings. Other changes concern the rules determining the competent jurisdiction and also so-called secondary insolvency proceedings. In addition, the regulation strengthens the information of creditors and aims to distinguish between bankruptcies linked to honest business people and those that are more fraudulent.
The European Parliament backed the Commission on the following points: - extending the rules to cover rescue proceedings; - creating a European system of insolvency registrations on the internet; - the possibility of avoiding multiple proceedings being opened;- and rules on the insolvency of groups of companies. Reding welcomed this in a press release. The Council has not yet adopted an approach on the draft law. A general agreement is possible at the informal Council of justice and home affairs ministers in June. (SP/transl.fl)