The European Parliament’s Committee on Legal Affairs held a public hearing on the harmonisation of insolvency law on Wednesday 29 January.
In December 2022 (see EUROPE 13079/2), the Commission proposed a text aimed at simplifying and standardising certain procedures, particularly for micro-enterprises. While the aim is to reduce costs and speed up procedures, several experts and MEPs have expressed strong reservations.
For example, Professor Björn Laukemann, a specialist in insolvency law at the University of Tübingen (Germany), questioned the possibility of winding up a micro-business without a practitioner.
In his view, this could “delay the resolution of financial difficulties” and create “a standard procedure for almost all companies”.
In fact, he proposed limiting this option to companies with “fewer than 20 creditors”.
For François Desprat, Chair of the French National Council of Judicial Administrators and Representatives, liquidation without an independent expert is not without risk.
“Who will draw up the list of creditors? Who will ensure compliance with anti money-laundering?” he asked. He also pointed out that France has a system for remunerating administrators “at no cost to the company or the public purse”.
René Repasi MEP (S&D, German), shadow rapporteur and rapporteur for the Committee on Economic and Monetary Affairs (ECON), called for more attention to be paid to the monitoring of procedures. “We must not create a legal loophole” that would allow companies to escape all control, he argued.
The MEP also proposed that the number of creditors be taken into account when deciding whether a practitioner is needed.
On the pre-negotiated sale (‘pre-pack’ ), which enables a company to be sold before it is officially wound up, Sophie Jacmain, a lawyer at NautaDutilh, emphasised that this procedure “saves jobs”.
Sophia Zakarie, Director of Corporate Policy and Legal Affairs at SMEunited, the organisation representing SMEs, was more cautious. She warned of “a lack of clarity” and called for workers to be guaranteed protection.
In addition, the European Commission representative, taking note of the criticisms, said he was open to adjustments. He acknowledged that “we need to think about a more balanced model”..
Discussions will continue in the parliamentary committee in order to improve the text and guarantee its economic effectiveness. (Original version in French by Nithya Paquiry)