In Luxembourg on Thursday 11 October, the European justice ministers reached agreement on a general approach to the proposed directive establishing a single legal framework to deal with corporate insolvency (see EUROPE 11673).
"Of course, we have all had to make compromises", said the Austrian minister, Josef Moser, who considers that they have ended up with a "balanced" text.
Back in June (see EUROPE 12033), the member states agreed on a 'partial general approach' and, on 26 September, the ambassadors of the member states to the EU (Coreper) gave their approval to the compromise text of the Austrian Presidency of the Council concerning the whole directive (see EUROPE 12104).
This compromise text also allows member states to introduce a debtor viability test in their national legislations, as long as it aims to exclude debtors with no prospects of viability and can be carried out without damaging the debtor's assets (see EUROPE 12023).
It also allows for temporary respite for the debtor, in the form of a suspension from procedures for up to four months, which can be prolonged by a court or administrative authority up to 12 months.
The ministers also took note of the principal of an 'intraclass cramdown' mechanism, to ensure that dissenting minor creditors and shareholders cannot block the adoption of the restructuring plan of a viable business.
The Commission considers that these provisions "will make a big difference in the years to come for our businesses". Even so, European Commissioner for Justice Věra Jourová regrets some of the changes to the initial text, such as the collection of statistical data to monitor the effectiveness of procedures, which has been made optional, or extending the implementation period of the directive to three years.
Negotiations with the European Parliament, which reached its negotiating position in July (see EUROPE 12054), may therefore commence.
Ireland has already said that some of the European Parliament's amendments are absolutely unacceptable and has called to retain the leeway afforded the member states in the text. France will pay particular attention to ensuring a balance between the interests of debtors and those of creditors, as well as the attractiveness of procedures for SMEs. (Original version in French by Marion Fontana)