On Monday 4 June in Luxembourg, Justice Ministers from the EU member states reached an agreement on a partial general approach for the draft directive setting up a single legal framework for tackling business insolvency (see EUROPE 11673).
Věra Jourová, the European Commissioner for Justice stated, "Reaching a partial general approach (…) today will facilitate the completion of negotiations on the remaining parts".
It should be recalled that the draft compromise focuses on titles III (second chance for entrepreneurs), IV (measures to increase procedural efficiency), V (follow-up procedures) and certain related recitals and definitions, particularly those relating to “entrepreneurs” and “debt remission” (see EUROPE 12023).
The member states validated the principle according to which an honest entrepreneur that has become insolvent should be given a “second chance” and released from their debts after a maximum three-year period.
Member states that did not approve this duration and which were advocating five years instead, such as the Czech Republic, Croatia and Slovenia (see EUROPE 11922), ceased their resistance and agreed to the compromise on the condition, however, that article 22 is maintained, as well as the range of derogations that allow them to: limit access to the rehabilitation procedure; extend the rehabilitation period; or revoke rehabilitation.
Commission’s disappointment. Although Commissioner Věra Jourová welcomed an agreement on the “second chance” section, she did, however, express her disappointment about the sections on “procedural efficiency and follow-up”.
With regard to statistical data collection when monitoring the efficiency procedures, she regretted that the text made it voluntary for certain data, particularly data relating to the average cost of each kind of procedure as well as the average recovery rates for guaranteed and non-guaranteed debt recovery. It should be pointed out that Germany, although not opposed to the compromise, did make a statement on this point, included in the minutes to the meeting, that this collection should be made compulsory.
The Commission also regretted the extension of the period for implementing the provision on using electronic communication resources for certain procedural stages from three to five years in general and seven years for dispute and appeals. (Original version in French by Marion Fontana)