Following a second inter-institutional negotiation meeting (trilogue), representatives of the Council of the European Union and the European Parliament reached a provisional political agreement on Wednesday evening (19 November) on the directive aimed at harmonising several aspects of insolvency law in the European Union (see EUROPE 13079/2).
This rapid result is a step forward for the realisation of the Union of capital markets, given that current divergences between the 27 national regimes hamper cross-border investments (see EUROPE 13079/2).
The future directive establishes common minimum standards on several major aspects of insolvency proceedings, with a view to maximising the value recoverable by creditors and improving the efficiency of proceedings, which still vary widely from one Member State to another.
For both the Danish Presidency of the Council and MEPs, this harmonisation process is necessary to improve legal predictability and make the EU more attractive to international investors.
Moving forward, the rules on annulment actions will be harmonised to prevent transactions concluded prior to the commencement of proceedings from unduly benefiting certain creditors to the detriment of others.
On the subject of transparency, Member States will have to ensure that insolvency practitioners have simplified access to national and interconnected banking registers, as well as to registers of beneficial owners and certain national registers, particularly when these professionals are established in another EU country.
The agreement also generalises the introduction of a European ‘pre-pack’, enabling upstream preparation for the sale of a company in difficulty and rapid execution of the sale when the procedure is initiated. In addition, guarantees are provided to protect contractual freedom and the individual and collective rights of employees.
The text also allows for the introduction of simplified winding-up procedures for micro-enterprises, if Member States so wish.
As regards the conditions governing directors’ liability, directors will have to file for pre-pack proceedings within three months at the most, unless alternative measures provide fair protection for creditors.
It should be noted that, under certain conditions, the directive requires the setting up of a creditors’ committee, which employees can join if they are creditors.
The agreement will now have to be formally approved by the two institutions. Once it has been published in the EU’s Official Journal, Member States will have two years and nine months to transpose the directive. (Original version in French by Nithya Paquiry)