At the Justice Council in Luxembourg on Friday 14 June, the Belgian Presidency presented progress on the directive aimed at harmonising certain aspects of insolvency law in Europe. Paul Van Tigchelt, Belgian Minister for Justice and the North Sea, stressed the importance of this text, saying that “the creation of a single market for capital is essential to free up financing and stimulate European growth”.
Issued by the Commission in December 2022 (see EUROPE 13079/2), this legislation, which proposes measures to encourage cross-border investment, is part of the Capital Markets Union (CMU) action plan and deals in particular with rules on nullity actions, asset monitoring, pre-pack proceedings and directors’ obligations. The proposal is currently being examined by the Council’s working group on civil law issues.
For nullity actions, the political debate at the Council in October 2023 (see EUROPE 13276/8) highlighted the need for greater flexibility, with adjustments to allow broader coverage and adaptation to national legislation.
With regard to asset tracing, the main concerns were the administrative burden and data protection. Compromises have been reached, in line with the EU’s new anti-money laundering reform package.
Pre-pack proceedings introduce a liquidation prepared to optimise the recovery of value for creditors. Coexistence with national systems was addressed to clarify the interaction of the pre-pack proceedings phases with normal insolvency proceedings.
Lastly, the directive proposes that managers be required to submit an application for the opening of pre-pack proceedings within three months of becoming aware of the company’s insolvency. Adjustments have been made to clarify this obligation and the situations in which it applies, and to specify the liability of directors in the event of failure to comply.
Mr Van Tigchelt returned to the issues surrounding special regimes for micro-enterprises, which remain a major concern. He stressed that certain provisions, such as pre-pack proceedings, still needed to be discussed in depth.
Technical work aimed at reaching a common position among the Member States will continue over the coming months under the Hungarian Presidency.
The report: https://aeur.eu/f/cnu (Original version in French by Nithya Paquiry)