Author: Dr. Björn Laukemann, Maître en droit (Aix-en-Provence), Senior Research Fellow at the Max Plack Institute Luxembourg for International, European and Regulatory Procedural Law
Following the external evaluation (Part 1), the EU Commission released a proposal for the amendment of the European Insolvency Regulation in December 2012, aimed at enhancing the efficiency of cross border insolvency proceedings and thus ensuring a proper “functioning of the internal market and its resilience in economic crises”. The following main changes were proposed:
- The Regulation’s scope of application now includes hybrid proceedings (“debtor in possession”), pre-insolvency proceedings and debt discharge proceedings for natural persons. The Commission will scrutinize whether specific national proceedings fall within the revised scope.
- Retaining the jurisdictional criterion of the debtor’s centre of main interests, the proposal clarifies the criteria and improves the procedural framework for determining the competent court (examination ex officio, information of foreign creditors and creditors’ right to judicial review).
- The proposal empowers the court to refuse to open secondary proceedings (i.e. parallel territorial proceedings opened in the Member State of the debtor’s establishment) if they are unnecessary to protect the interests of local creditors, and thus to reduce detrimental effects on rescue efforts (abolishment of the winding-up-requirement; improved cooperation and communication between main and secondary proceedings, also on a court-to-court basis).
- Member States are required to establish publicly accessible and interconnected electronic registers in which the relevant court decisions are published.
- The implementation of standard forms will facilitate the lodging of claims for foreign creditors.
- A framework for the coordination of insolvency proceedings within groups of companies is set up (obligation of courts and liquidators to cooperate and communicate with each other; extending certain rights of administrators to proceedings of other group members, e.g. the right to be heard, to participate, to request a stay of proceedings and to propose a rescue plan).
Part 3 will address the reactions of the European Parliament and the Council and comment on ongoing and future developments.