Brussels, 03/03/2000 (Agence Europe) - Following its rapporteur Kurt Lechner, CDU member, the EP approved the regulation on insolvency proceedings which fills a gap when dealing with cross-border problems relating to the assets of insolvent debtors. Mr Lechner welcomes the initiative launched by Finland and Germany aimed at setting a legal framework in place for insolvency proceedings with cross-border impact, recalling that the proposal is based on a 1995 compromise on which the Parliament said it was substantially in agreement, adopting the Malangré Report in Mary 1999.
Mr Lechner notes in the regulation proposed a particularly important innovation, "which can be described as a breakthrough", where the text states that any judgement opening insolvency proceedings handed down by a court of a Member State within whose jurisdiction the "centre of a debtor's main interests is situated" "shall be recognised in all the other Member States". One of the amendments adopted in plenary clarifies the provisions relating to reinsurance. Another states that the European Commission will present, five years after the entry into force of the regulation, a report on the experience acquired containing, where necessary, proposals for improvement.
EUROPE stresses that the European Commission had already taken, in the sixties, an initiative aimed at resolving on a European base the problem of debtor insolvency (in general, insolvency has no legal impact except within the country that decreed it. It is impossible to seize the assets of a debtor abroad). The Commission proposal followed a universal approach, by introducing a single procedure on all of the debtor's assets and on all of the creditors' rights. The Member States did not agree on such a wide solution and, in 1984, the Council had buried the project, noting that, in order to submit all the creditors' rights to a single legal system, it would be necessary to first harmonise the national systems.
The Member States had then begun, in 1995, a political agreement on a less ambitious base, admitting the possibility of cross-border principle insolvency proceeding, but with the possibility of secondary proceedings in parallel. It is on this basis that Germany and Finland proposed, under the right of initiative recognised to the Member States in the fields of the third pillar, the regulation under examination, which mainly takes up the 1995 compromise. The parliamentary committee for justice and home affairs expressed an opinion that was in substance favourable (rapporteur for opinion Margot Kessler) for the following reasons: "The legal orders of the Member States vary too widely, and there is no political will to achieve wide-ranging standardisation of procedural law and law on property. That is quite understandable if we bear in mind the fact that national private law systems have evolved over centuries (…) Radical changes, even those designed to bring about harmonisation, would also result in major uncertainty, excessive recourse to the courts and a huge increase in the number of proceedings opened. For some time at least, harmonisation would be achieved at the expense of legal certainty. (…) Although it does not actually implement the principle of universality, this proposal for a regulation does represent an improvement in the situation, since it provides for at least the main insolvency proceedings to have cross-border effect".