What changed

PA_Legam

SHORT JUSTIFICATION

On 28 November 2023 the ECON opinion for the Committee on Legal Affairs (JURI) on the proposal for a directive of the European Parliament and of the Council harmonising certain aspects of insolvency law was voted and adopted. Nevertheless, it has formally lapsed with the start of the new mandate and the Conference of Presidents has confirmed that ECON is still entitled to give an opinion under rule 57. Indeed, it remains important for ECON Committee to have impact on this key piece of legislation. Following internal consultations, it is deemed appropriate by a majority of the negotiation team to re-table the compromise achieved in the previous mandate. This was a carefully crafted compromise which brought together divergent perspectives on insolvency law harmonisation. Consequently, this document is identical to the opinion adopted in ECON and will be brought to a vote without changes. In any case, the ordinary procedure is followed, so formally a deadline for amendments will still be opened.

AMENDMENTS

The Committee on Economic and Monetary Affairs calls on the Committee on on Legal Affaires,Affairs, as the committee responsible, to take the following into account:

Amendment 1

(2) The wide differences in substantive insolvency laws acknowledged by Regulation (EU) 2015/848 of the European Parliament and of the Council32 create barriers to the internal market by reducing the attractiveness of cross-border investments, thus impacting the cross-border movement of capital within the Union and to and from third countries.

(2) The wide differences in substantive insolvency laws acknowledged by Regulation (EU) 2015/848 of the European Parliament and of the Council32 and the stark divergence in the quality of domestic insolvency procedures as measured by the World Bank32a create barriers to the internal market by reducing the attractiveness of cross-border investments, thus impacting the viability of economic operation and the cross-border movement of capital within the Union and to and from third countries. It also means that harmonisation of certain aspects of insolvency law may require considerable changes in some Member States.

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(3) Insolvency proceedings ensure the orderly winding down or restructuring of companies or entrepreneurs in financial and economic distress. These proceedings are key in financial investments, as they determine the final recovery value of such investments. Diverging rules among Member States have contributed to increasing legal uncertainty and unpredictability about insolvency proceedings’ outcome, so raising barriers especially for cross-border investments in the internal market. Large divergences in recovery value and time required to complete insolvency proceedings across the Union have negative repercussions on cost predictability for creditors and investors in cross-border situations in the internal market.

(3) Insolvency proceedings ensure the orderly winding down or restructuring of companies or entrepreneurs in financial and economic distress. These proceedings are key in financial investments, as they determine the final recovery value of such investments. Diverging rules among Member States have contributed to increasing legal uncertainty and unpredictability about the firms value and insolvency proceedings’ outcome, so raising barriers especially for cross-border investments in the internal market. This uncertainty acts as a disincentive which obstructs the freedom of establishment of undertakings and the willingness to entrepreneurship thus harming the proper functioning of the internal market. Small and medium-sized enterprises, in particular, often lack the necessary resources to assess risks related to cross-border activities. Large divergences in recovery value and time required to complete insolvency proceedings across the Union have negative repercussions on cost predictability for creditors and investors in cross-border situations in the internal market, which acts as a disincentive to investment and makes it more difficult to attract foreign capital into EU territory.market.

Or. en

(4) The integration of the internal market in the area of insolvency laws pursued by this Directive is a key tool for a more efficient functioning of the capital markets in the European Union, including greater access to corporate financing. Therefore, it is necessary to set out minimum requirements in targeted areas of national insolvency proceedings, which have a significant impact on the efficiency and length of such proceedings, especially on cross-border insolvency proceedings.

(4) The integration of the internal market in the area of insolvency laws pursued by this Directive is a key tool for a more efficient functioning of the capital markets in the European Union, including greater access to corporate financing, diversification of portfolios and investment opportunities, while also preventing the build-up of non-performing loans (NPL)debt .financing. Therefore, it is necessary to set out minimum requirements in targeted areas of national insolvency proceedings, as well as creating heightened risks and costs for investors, which have a significant impact on the efficiency and length of such proceedings, especially on cross-border insolvency proceedings. This includes minimum requirements for employees.

Or. en

Amendment

(4 a) The minimum standards laid down in this Directive aim to harmonise Member State’s insolvency law, in particular when it comes to, maximization of legal certainty about a firm’s value, improving efficiency of insolvency procedures both in terms of costs and length (especially for microenterprises and SMEs), protecting employees and preserving jobs and improving predictability and fair distribution of value amongst creditors. It should be understood that employees, to whom a company ows a debt the moment they deliver their labour, can be regarded as creditors.

(4a) Harmonisation of insolvency proceedings is associated with lower costs of credit, increased access to credit, improved creditor recovery and more effective protection of workers. At the same time one of the goals when completing the Capital Market Union is to stimulate more equity financing, and figures on how more debt financing through better protection of creditor rights will impact equity financing, are inconclusive. It is therefore key to create a harmonised tax environment that places debt and equity financing on an equal footing in the EU in parallel with this Directive, in line with the goals of the DEBRA proposal.

Or. en

Proposal for a directive

Recital 4 b (new)

Recital 8

Text proposed by the Commission

Amendment

(4 b) Harmonisation of insolvency proceedings is associated with lower costs of credit, increased access to credit, improved creditor recovery and more effective protection of workers. At the same time one of the goals when completing the Capital Market Union is to stimulate more equity financing, and figures on how more debt financing through better protection of creditor rights will impact equity financing, are inconclusive. Therefore, a legal instrument to harmonize the legislative solutions for the debt-equity bias, without prejudice to the legitimate and effective use of debt instruments, is necessary in order to place debt and equity financing on an equal footing in the EU in parallel with this Directive.

(8) In the context of avoidance actions, a distinction should be made between legal acts where the claim of the counterparty was due and enforceable and has been satisfied in the owed manner (congruent coverages) and those where performance was not entirely in accordance with the creditor’s claim (incongruent coverage). Incongruent coverages include, in particular, premature payments, the satisfaction with unusual means of payments, the subsequent collateralisation of a so far unsecured claim which was not already agreed upon in the original debt agreement, granting an extraordinary termination right or other amendments not provided for in the underlying contract, the waiver of legal defences or objections or the acknowledgement of disputable debts. In the case of congruent coverages, the avoidance ground of preferences can only be invoked if the creditor of the legal act that can be declared void knew, or should have known, at the time of the transaction that the debtor was insolvent.

(8) In the context of avoidance actions, a distinction should be made between legal acts where the claim of the counterparty was due and enforceable and has been satisfied in the owed manner (congruent coverages) and those where performance was not entirely in accordance with the creditor’s claim (incongruent coverage). Incongruent coverages include, in particular, premature payments, the satisfaction with unusual means of payments, the subsequent collateralisation of a so far unsecured claim which was not already agreed upon in the original debt agreement, granting an extraordinary termination right or other amendments not provided for in the underlying contract, the waiver of legal defences or objections or the acknowledgement of disputable debts. In the case of congruent coverages, the avoidance ground of preferences can only be invoked if the creditor of the legal act that can be declared void knew, at the time of the transaction that the debtor was insolvent.

Or. en

Proposal for a directive

Recital 5 a (new)

Recital 9

Text proposed by the Commission

Amendment

(5 a) Exceptionally, when the perfection of a legal act requires registration in a public register, e.g. the land register, the legal act may be deemed to be perfected before the registration takes place.

(9) Certain congruent coverages, namely legal acts that are performed directly against fair consideration to the benefit of the insolvency estate, should be exempted from the scope of legal acts that can be declared void. Those legal acts aim at supporting the ordinary daily activity of the debtor’s business. Legal acts falling under this exception should have a contractual basis, and require the direct exchange of the mutual performances, but not necessarily a simultaneous exchange of performances, as, in some cases, unavoidable delays may result from practical circumstances. However, this exemption should not cover the granting of credit. Furthermore, performance and counter-performance in those legal acts should have an equivalence in value. At the same time, the counter-performance should benefit the estate and not a third party. This exception should cover, in particular, prompt payment of commodities, wages, or service fees, in particular for legal or economic advisors; cash or card payment of goods necessary for the debtor’s daily activity; delivery of goods, products, or services against payment by return; creation of a security right against disbursement of the loan; prompt payment of public fees against consideration (e.g. admittance to public grounds or institutions).

(9) Certain congruent coverages, namely legal acts that are performed directly against fair consideration to the benefit of the insolvency estate, in particular wages, should be exempted from the scope of legal acts that can be declared void. Those legal acts aim at supporting the ordinary daily activity of the debtor’s business. Legal acts falling under this exception should have a contractual basis, and require the direct exchange of the mutual performances, but not necessarily a simultaneous exchange of performances, as, in some cases, unavoidable delays may result from practical circumstances. However, this exemption should not cover the granting of credit. Furthermore, performance and counter-performance in those legal acts should have an equivalence in value. At the same time, the counter-performance should benefit the estate and not a third party. This exception should cover, in particular, prompt payment of commodities, wages, or service fees, in particular for legal or economic advisors; cash or card payment of goods necessary for the debtor’s daily activity; delivery of goods, products, or services against payment by return; creation of a security right against disbursement of the loan; prompt payment of public fees against consideration (e.g. admittance to public grounds or institutions).

Or. en

Proposal for a directive

Recital 824

Text proposed by the Commission

Amendment

(8) In the context of avoidance actions, a distinction should be made between legal acts where the claim of the counterparty was due and enforceable and has been satisfied in the owed manner (congruent coverages) and those where performance was not entirely in accordance with the creditor’s claim (incongruent coverage). Incongruent coverages include, in particular, premature payments, the satisfaction with unusual means of payments, the subsequent collateralisation of a so far unsecured claim which was not already agreed upon in the original debt agreement, granting an extraordinary termination right or other amendments not provided for in the underlying contract, the waiver of legal defences or objections or the acknowledgement of disputable debts. In the case of congruent coverages, the avoidance ground of preferences can only be invoked if the creditor of the legal act that can be declared void knew, or should have known, at the time of the transaction that the debtor was insolvent.

(24) The pre-pack proceedings should ensure that the monitor appointed in the preparation phase might propose the best bid obtained during the sale process for authorisation by the court only if it declares that, in its view, piecemeal liquidation would not recover manifestly more value for creditors than the market price obtained for the business (or part thereof) as a going concern. The going-concern value is, as a rule, higher than the piecemeal liquidation value because it is based on the assumption that the business continues its activity with the minimum of disruption, has the confidence of financial creditors, shareholders and clients and continues to generate revenues. Therefore, the monitor’s declaration should not require a valuation being made in every case. The monitor should only reasonably conclude that the sale price is not significantly lower than the proceeds that could be recovered through a piecemeal liquidation. However, an increased scrutiny should be required from the monitor or the insolvency practitioner in cases where the only existing offer is made by a party who is closely related to the debtor. In such situations, the monitor or the insolvency practitioner should reject the offer if it does not satisfy the best-interest-of-creditors test.

(8) In the context of avoidance actions, a distinction should be made between legal acts where the claim of the counterparty was due and enforceable and has been satisfied in the owed manner (congruent coverages) and those where performance was not entirely in accordance with the creditor’s claim (incongruent coverage). Incongruent coverages include, in particular, premature payments, the satisfaction with unusual means of payments, the subsequent collateralisation of a so far unsecured claim which was not already agreed upon in the original debt agreement, granting an extraordinary termination right or other amendments not provided for in the underlying contract, the waiver of legal defences or objections or the acknowledgement of disputable debts. In the case of congruent coverages, the avoidance ground of preferences can only be invoked if the creditor of the legal act that can be declared void knew at the time of the transaction that the debtor was insolvent.

(24) The pre-pack proceedings should ensure that the monitor appointed in the preparation phase might propose the best bid obtained during the sale process for authorisation by the court only if it declares that, in its view, piecemeal liquidation would not recover manifestly more value for creditors than the market price obtained for the business (or part thereof) as a going concern. The going-concern value is, as a rule, higher than the piecemeal liquidation value because it is based on the assumption that the business continues its activity with the minimum of disruption, has the confidence of financial creditors, shareholders and clients and continues to generate revenues. Therefore, the monitor’s declaration should not require a valuation being made in every case. The monitor should only reasonably conclude that the sale price is not significantly lower than the proceeds that could be recovered through a piecemeal liquidation. However, an increased scrutiny should be required from the monitor or the insolvency practitioner in cases where the only existing offer is made by a party who is closely related to the debtor. In such situations, the monitor or the insolvency practitioner should reject the offer if it does not satisfy the objectives of insolvency law.

Or. en

Proposal for a directive

Recital 25

Text proposed by the Commission

Amendment

(25) In order to guarantee that the business is sold at the best market value during the pre-pack proceedings, Member States should either ensure high standards of competitiveness, transparency and fairness of the sale process conducted in the preparation phase, or provide that the court runs a brief public auction after the opening of the liquidation phase of the proceedings.

(25) In order to guarantee that the business is sold at the best market value during the pre-pack proceedings, Member States should either ensure high standards of competitiveness, transparency and fairness of the sale process conducted in the preparation phase, as well as access to independent valuation where required or provide that the court runs a brief public auction after the opening of the liquidation phase of the proceedings.

Or. en

Amendment 10

Proposal for a directive

Recital 28

(28) The opening of insolvency proceedings should not result in the early termination of contracts under which the parties still have obligations to perform (executory contracts), which are necessary for the continuation of business operations. Such termination would unduly jeopardise the value of the business, or part thereof, to be sold in the pre-pack proceedings. It should, therefore, be ensured that those contracts are assigned to the acquirer of the business of the debtor or part thereof, even without the consent of the counterparty of the debtor to those contracts. Nonetheless, there are situations where the assignment of the executory contracts cannot be reasonably expected, such as when the acquirer is a competitor of the counterparty of the contract. Similarly, the court may come to the conclusion in an individual assessment of an executory contract that its termination would serve the interests of the business of the debtor better than its assignment, such as when the assignment of the contract would result in a disproportionate burden for the business. The court should not be allowed, however, to terminate executory contracts relating to licenses of intellectual and industrial property rights, as they are usually key components of the operations of the business being sold.

(28) The opening of insolvency proceedings should not result in the early termination of contracts under which the parties still have obligations to perform (executory contracts), which are necessary for the continuation of business operations. Such termination would unduly jeopardise the value of the business, or part thereof, to be sold in the pre-pack proceedings. It should, therefore, be ensured that those contracts are assigned to the acquirer of the business of the debtor or part thereof, after consultation of the counterparty of the debtor to those contracts. Nonetheless, there are situations where the assignment of the executory contracts cannot be allowed, such as when the acquirer is a competitor of the counterparty of the contract or when it binds employees to a contract partner they have not chosen .chosen. Similarly, the courtinsolvency practitioner may come to the conclusion in an individual assessment of an executory contract that its termination would serve the interests of the business of the debtor better than its assignment, such as when the assignment of the contract would result in a disproportionate burden for the business. The courtinsolvency practitioner should not be allowed, however, to terminate executory contracts relating to licenses of intellectual and industrial property rights, as they are usually key components of the operations of the business being sold.

Or. en

Amendment 11

Proposal for a directive

Recital 35

Text proposed by the Commission

Amendment

(35) National insolvency rules are not always fit to treat insolvent microenterprises properly and in a proportionate manner. Taking into account the unique characteristics of microenterprises and their specific needs in financial distress, in particular the need for faster, simpler, and affordable procedures should be acknowledged, separate insolvency proceedings should be developed at national level in accordance with the provisions of this Directive. Although the provisions of this Directive concerning simplified winding-up proceedings only apply to microenterprises, it should be possible for Member States to extend their application also to small and medium-sized enterprises that are not microenterprises.

(35) National insolvency rules are not always fit to treat insolvent microenterprises and SMEs properly and in a proportionate manner. Taking into account the unique characteristics of microenterprises and SMEs and their specific needs in financial distress, in particular the need for faster, simpler, and affordable procedures should be acknowledged, separate insolvency proceedings should be developed at national level in accordance with the provisions of this Directive.

Or. en

Amendment 12

Proposal for a directive

Recital 38

Text proposed by the Commission

Amendment

(38) In order to establish cost-effective and expeditious simplified winding-up proceedings for microenterprises, short deadlines should be introduced. Similarly, formalities for all procedural steps, including for the opening of the proceedings, the lodgement and the admission of claims, the establishment of the insolvency estate and the realisation of the assets should be minimised. A standard form should be used for submitting a request to open simplified winding-up proceedings and electronic means should be used for all communications between the competent authority, and where relevant, the insolvency practitioner, and the parties to the proceedings.

(38) In order to establish cost-effective and expeditious simplified winding-up proceedings for microenterprises and SMEs, short deadlines should be introduced. Similarly, formalities for all procedural steps, including for the opening of the proceedings, the lodgement and the admission of claims, the establishment of the insolvency estate and the realisation of the assets should be minimised. A standard form should be used for submitting a request to open simplified winding-up proceedings and electronic means should be used for all communications between the competent authority, and where relevant, the insolvency practitioner, and the parties to the proceedings.

Or. en

Amendment 13

Proposal for a directive

Recital 39

Text proposed by the Commission

Amendment

(39) All microenterprises should be able to commence proceedings to address their financial difficulties and obtain a discharge. Access to simplified winding-up proceedings should not depend on the microenterprise’s ability to cover the administrative costs of such proceedings. The laws of the Member States should introduce rules for covering the costs of administering simplified winding-up proceedings where assets and sources of revenue of the debtor are insufficient to cover those costs.

(39) All microenterprises and SMEs should be able to commence proceedings to address their financial difficulties and obtain a discharge. Access to simplified winding-up proceedings should not depend on their ability to cover the administrative costs of such proceedings. The laws of the Member States should introduce rules for covering the costs of administering simplified winding-up proceedings where assets and sources of revenue of the debtor are insufficient to cover those costs.

Or. en

Amendment 14

Proposal for a directive

Recital 40

Text proposed by the Commission

Amendment

(40) In simplified winding-up proceedings, the appointment of an insolvency practitioner is usually unnecessary given the simple business operations carried out by the microenterprises that make their supervision by the competent authority possible and sufficient. Therefore, the debtor should remain in control of its assets and day-to-day operation of the business. At the same time, to ensure that simplified winding-up proceedings can be conducted effectively and efficiently, the debtor should, upon commencement of and throughout the proceedings, provide accurate, reliable and complete information relating to its financial position and business affairs.

deleted

Or. en

Amendment 15

Proposal for a directive

Recital 41

Text proposed by the Commission

Amendment

(41) A microenterprise debtor should be able to benefit from a temporary stay of individual enforcement actions, in order to be able to preserve the value of the insolvency estate and ensure a fair and orderly conduct of the proceedings. Member States, however, may allow competent authorities to exclude certain claims from the scope of the stay, in well-defined circumstances.

(41) A microenterprise or SME debtor should be able to benefit from a temporary stay of individual enforcement actions, in order to be able to preserve the value of the insolvency estate and ensure a fair and orderly conduct of the proceedings. Member States, however, may allow competent authorities to exclude certain claims from the scope of the stay, in well-defined circumstances.

Or. en

Amendment 16

Proposal for a directive

Recital 42

Text proposed by the Commission

Amendment

(42) Disputed claims should be dealt with in a way that does not unnecessarily complicate the conduct of simplified winding-up proceedings for microenterprises. If disputed claims cannot be quickly dealt with, the ability to dispute a claim may be used to create unnecessary delays. In deciding on the treatment of a disputed claim, the competent authority should be empowered to allow the continuation of the simplified winding-up proceedings with respect to undisputed claims only.

(42) Disputed claims should be dealt with in a way that does not unnecessarily complicate the conduct of simplified winding-up proceedings for microenterprises and for SMEs. If disputed claims cannot be quickly dealt with, the ability to dispute a claim may be used to create unnecessary delays. In deciding on the treatment of a disputed claim, the competent authority should be empowered to allow the continuation of the simplified winding-up proceedings with respect to undisputed claims only.

Or. en

Amendment 1710

Proposal for a directive

(50) Fair representation of creditors in the creditors’ committee is particularly important in relation to unsecured creditors that are micro, small or medium-sized enterprises, which in the case of insolvency of a debtor which is a large enterprise, if not paid promptly, are also exposed to insolvency (domino effect). Proper representation in the creditors’ committee of such creditors could ensure that in the course of the distribution of the recovered proceeds they receive their parts more expeditiously.

(50) Fair representation of creditors in the creditors’ committee is particularly important to employees, for whom the delay of wage payments regularly poses an existential threat, as well as to unsecured creditors that are micro, small or medium-sized enterprises, which in the case of insolvency of a debtor which is a large enterprise, if not paid promptly, are also exposed to insolvency (domino effect). Proper representation in the creditors’ committee of such creditors, including the representation of interests of employees through the appointment of a representatitive in the creditors’ committee,creditors could ensure that in the course of the distribution of the recovered proceeds they receive their parts more expeditiously.

Or. en

Amendment 1811

Proposal for a directive

Or. en

Amendment 1912

Proposal for a directive

Article 1 – paragraph 1 – point e

Text proposed by the Commission

Amendment

(e) simplified winding-up proceedings for microenterprises;

(e) simplified winding-up proceedings for microenterprises and SMEs;

Or. en

Amendment 20

Proposal for a directive

Article 2 – paragraph 1 – point q

Text proposed by the Commission

Amendment

(q) ‘party closely related to the debtor’ means persons, including legal persons, with preferential access to non-public information on the affairs of the debtor.

(q) ‘party closely related to the debtor’ means persons, including legal persons, provided they have preferential access to non-public information on the affairs of the debtor.

Or. en

Amendment 21

Proposal for a directive

Article 2 – paragraph 1 – point q a (new)

Text proposed by the Commission

Amendment

(q a) ‘contract for the lease of goods’ means a contract under which one party, the lessor, undertakes to provide the other party, the lessee, with a temporary right of use of goods in exchange for rent without the parties having agreed that ownership will be transferred after a period with right of use. The rent may be in the form of money or other value.

Or. en

Amendment 22

Proposal for a directive

Article 2 – paragraph 2 – introductory part

Text proposed by the Commission

Amendment

Where the debtor is a natural person, closely related parties shall include in particular:

Where the debtor is a natural person:

Or. en

Amendment 23

Proposal for a directive

Article 2 – paragraph 3 – introductory part

Text proposed by the Commission

Amendment

Where the debtor is a legal entity, closely related parties shall include in particular:

Where the debtor is a legal entity:

Or. en

Amendment 24

Proposal for a directive

Article 41 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

Member States may adopt or maintain rules according to which exceptionally a legal act which in order to be perfected must be registered in a public register is deemed to be perfected before the registration takes place.

1a. The minimum standards laid down in this Directive aim to converge Member State’s insolvency law, in particular having regard to the following objectives:

(a) maximization of [legal certainty about] a firm’s value;

(b) improving efficiency of insolvency procedures both in terms of cost and length (especially for microenterprises);

(c) improving predictability and fair distribution of value amongst creditors;

(d) protecting employees and preserving jobs.

Or. en

Amendment 2513

Proposal for a directive

Article 56 – paragraph 2 – subparagraph 1 a– (new)point b

Text proposed by the Commission

Amendment

This Directive is without prejudice to workers’ rights to be informed and consulted in accordance with Union and national law on insolvency plans or elements of insolvency plans which may impact on terms and conditions of employment, structure of the undertaking, probable development and production and sales, substantial changes concerning organisation, introduction of new working methods or production processes, transfers of production, mergers, cut-backs or closures of undertakings or important parts thereof, and collective redundancies.

(b) that creditor knew, or should have known, that the debtor was unable to pay its mature debts or that a request for the opening of insolvency proceedings has been submitted.

(b) that creditor knew that the debtor was unable to pay its mature debts or that a request for the opening of insolvency proceedings has been submitted.

Or. en

Amendment 2614

Proposal for a directive

Article 6 – paragraph 23 – subparagraph 1 – point ba

Text proposed by the Commission

Amendment

(b) that creditor knew, or should have known, that the debtor was unable to pay its mature debts or that a request for the opening of insolvency proceedings has been submitted.

(a) legal acts performed directly against fair consideration to the benefit of the insolvency estate;

(b) that creditor knew that the debtor was unable to pay its mature debts or that a request for the opening of insolvency proceedings has been submitted.

(a) legal acts performed directly against fair consideration to the benefit of the insolvency estate, in particular wages;

Or. en

Amendment 2715

Proposal for a directive

Amendment

(c a) where relevant, in line with national law,(ca) legal acts that serve as satisfaction or collateralisation of claims of social security authorities.authorites.

Or. en

Amendment 2816

Proposal for a directive

Or. en

Amendment 2917

Proposal for a directive

Article 8 – paragraph 1 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

Member States shall ensure that legal acts by which the debtor has intentionally caused a detriment to the general body of creditors can be declared void where both of the following conditions are met:

Member States shall ensure that legal acts by which the debtor has intentionally caused a detriment to the general body of creditors can be declared void by court order where it is deemed just and equitable to do so where both of the following conditions are met:

Or. en

Amendment 30

Proposal for a directive

Or. en

Amendment 3118

Proposal for a directive

Article 11 – paragraph 1

Text proposed by the Commission

Amendment

1. Member States shall ensure that the rights laid down in Article 9 are enforceable against an heir or another universal successor of the party which benefitted from the legal act that has been declared void.

1. Member States shall ensure that the rights laid down in Article 9 are enforceable against an heir or another universal successor of the party which benefitted from the legal act that has been declared void, unless the acquisition was in good faith.

Or. en

Amendment 32

Proposal for a directive

Or. en

Amendment 3319

Proposal for a directive

1. Member States shall ensure that pre-pack proceedings are composed of the following two consecutive phases

1. Member States mayshall introduce pre-pack proceedings in situations, where the debtor is in a situation of likelihood of insolvency or is insolvent in accordance with national law. Member States shall ensure that pre-pack proceedings are composed of the following two consecutive phasesphases:

Or. en

Amendment 34

Proposal for a directive

Article 19 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

2 a. This Directive shall not prevent Member States from adopting or maintaining provisions relating to pre-pack proceedings where such provisions provide a greater protection of workers or their representatives than those set out in this Title.

Or. en

Amendment 35

Proposal for a directive

Article 22 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

Member States shall provide that, upon request of the debtor, the court appoints a monitor.

Member States shall provide that, upon request of the debtor, the court appoints a monitor where it is appropriate to do so.

Or. en

Amendment 36

Proposal for a directive

Article 22 – paragraph 2 – subparagraph 1 – point a a (new)

Text proposed by the Commission

Amendment

(a a) carries out its tasks in consultation with creditors, where reasonable;

Or. en

Amendment 37

Proposal for a directive

Article 22 – paragraph 2 – subparagraph 1 – point a b (new)

Text proposed by the Commission

Amendment

(a b) may have recourse to an independent valuation where appropriate in order to satisfy requirements related to achieving market value;

Or. en

Amendment 3820

Proposal for a directive

Amendment

(d a)(da) ensures participation of a committee of creditors;creditors.

Or. en

Amendment 39

Proposal for a directive

Article 23 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

Member States shall include the obtaining of the services of an independent valuation practitioner as a means of gauging a fair market price;

Or. en

Amendment 40

Proposal for a directive

Article 24 – paragraph 1

Text proposed by the Commission

Amendment

1. Member States shall ensure that the sale process carried out during the preparation phase is competitive, transparent, fair and meets market standards.

1. Member States shall ensure that the sale process carried out during the preparation phase is competitive, transparent, fair and meets market and social standards, and aims to achieve fair value for the purchase.

Or. en

Amendment 41

Proposal for a directive

Article 24 – paragraph 2

Text proposed by the Commission

Amendment

2. Where the sale process only produces one binding offer, that offer shall be deemed to reflect the business market price.

2. Where the sale process only produces one binding offer, that offer shall be deemed to reflect the business market price, unless it can be demonstrated otherwise.

Or. en

Amendment 4221

Proposal for a directive

Member States shall ensure that the acquirer of the debtor’s business or part thereof is assigned the executory contracts which are necessary for the continuation of the debtor’s business and the suspension of which would lead to a business standstill. The assignment shall not require the consent of the debtor’s counterparty or counterparties.

Member States shall ensure that the acquirer of the debtor’s business or part thereof is assigned the executory contracts which are necessary for the continuation of the debtor’s business. The assignment shall not require the consent of the debtor’s counterparty or counterparties. The assignment shall require the consultation of the debtor’s employees.

Or. en

Amendment 43

Proposal for a directive

Article 27 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

3 a. This Article is without prejudice to the rights and obligations foreseen under Directive 2001/23/EC and the right of an employee to object to the transfer of her or his employment contract under national law.

Or. en

Amendment 44

Proposal for a directive

Article 30 – paragraph 1

Text proposed by the Commission

Amendment

Member States shall ensure that the criteria to select the best bid in the pre-pack proceedings are the same as the criteria used to select between competing offers in winding-up proceedings.

Member States shall ensure that the criteria to select the best bid in the pre-pack proceedings include the safeguarding of employment as well are the same as the criteria used to select between competing offers in winding-up proceedings.

Or. en

Amendment 45

Proposal for a directive

Article 32 – paragraph 1 – subparagraph 1 – point b

Text proposed by the Commission

Amendment

(b) other parties to the sale process receive adequate information on the existence of parties closely related to the debtor and their relation to the latter;

(b) other parties to the sale process, including creditors, receive adequate information on the existence of parties closely related to the debtor and their relation to the latter;

Or. en

Amendment 4622

Proposal for a directive

Article 3227 – paragraph 12 – subparagraph 21 – introductory part

Text proposed by the Commission

Amendment

Member States mayshall provideensure that wherethe itcourt ismay proveddecide thatto terminate the disclosureexecutory dutycontracts referred to in theparagraph 1, first subparagraph, point (a), was breached,provided thethat courtone revokesof the benefits referred to infollowing Articleconditions 28.applies:

Member States may provide that where it isshall provedensure that the disclosure duty referred to in theinsolvency firstpractitioner subparagraph,may pointdecide (a)to andterminate the duty toexecutory informcontracts referred to in point (b), wereparagraph breached,1, thefirst courtsubparagraph, revokesprovided thethat benefitsone referredof tothe infollowing Articleconditions 28.applies:

Or. en

Amendment 4723

Proposal for a directive

Article 3627 – paragraph 13 a (new)

Text proposed by the Commission

Amendment

Member States shall ensure that, where a legal entity becomes insolvent, its directors are obliged to submit a request for the opening of insolvency proceedings with the court no later than 3 months after the directors became aware or can reasonably be expected to have been aware that the legal entity is insolvent.

3a. The provisions in this Article shall not apply to employment contracts.

Member States shall ensure that, where a legal entity is likely to become insolvent, its directors are obliged to take steps to avoid insolvency, and where insolvency can not be avoided, take all possible measures to avoid bankrupcty. In doing so, the director shall have regard to:

(a) the interests of the creditors, and

(b) the need to avoid deliberate or grossly negligent conduct that threatens the viability of the business of the company.

Notwithstanding the first subparagraph, Member States shall ensure that directors of an insolvent legal entity submit a request for the opening of insolvency proceedings with the court without undue delay after the directors became aware or can reasonably be expected to have been aware that the legal entity is insolvent.

Or. en

Amendment 4824

Proposal for a directive

Article 3728 – paragraph 21

Text proposed by the Commission

Amendment

2. Paragraph 1 shall be without prejudice to national rules on civil liability for the breach of the duty of directors to submit a request for the opening of insolvency proceedings as set out in Article 36 that are stricter towards directors.

Member States shall ensure that the acquirer acquires the debtor’s business or part thereof free of debts and liabilities, unless the acquirer expressly consents to bear the debts and the liabilities of the business or part thereof.

2. Paragraph 1 shall be without prejudice to national rules on civil liability for the breach of the duty of directors to avoid insolvency or bankruptcy and to submit a request for the opening of insolvency proceedings as set out in Article 36 that are stricter towards directors.

Member States shall ensure that the acquirer acquires the debtor’s business or part thereof free of debts and liabilities, unless the acquirer expressly consents to bear the debts and the liabilities of the business or part thereof. In this case the debtor remains jointly and severally liable with the acquirer.

This article is without prejudice to liabilities laid down by law and shall not apply to employment contracts.

Or. en

Amendment 4925

Proposal for a directive

Article 3832 – Titreparagraph 2

Text proposed by the Commission

Amendment

Rules on winding-up of microenterprises

2. Where the offer made by a party closely related to the debtor is the only existing offer, Member States shall introduce additional safeguards for the authorisation and execution of the sale of the debtor’s business or part thereof. These safeguards shall at least include the duty for the monitor and the insolvency practitioner to reject the offer from the party closely related to the debtor if the offer does not satisfy the best-interest-of-creditors test.

Rules on winding-up of microenterprises and SMEs

2. Where the offer made by a party closely related to the debtor is the only existing offer, Member States shall introduce additional safeguards for the authorisation and execution of the sale of the debtor’s business or part thereof. These safeguards shall at least include the duty for the monitor and the insolvency practitioner to reject the offer from the party closely related to the debtor if the offer does not satisfy the broader objectives of insolvency legislation as listed in Article 1(1a).

Or. en

Amendment 5026

Proposal for a directive

1. Member States shall ensure that microenterprises, when insolvent, have access to simplified winding-up proceedings that comply with the provisions laid down in this Title.

1. Member States shall ensure that microenterprises and SME,microenterprises, when insolvent, with less than 20 creditors at the moment of the request for opening an insolvency proceeding, have access to simplified winding-up proceedings that comply with the provisions laid down in this Title.

Or. en

Amendment 5127

Proposal for a directive

2. A microenterprise shall be deemed insolvent for the purposes of simplified winding-up proceedings when it is generally unable to pay its debts as they mature. Member States shall set out the conditions under which a microenterprise is deemed to be generally unable to pay its debts as they mature and ensure that these conditions are clear, simple and easily ascertainable by the microenterprise concerned.

2. A microenterprise or SME shall be deemed insolvent for the purposes of simplified winding-up proceedings when it is generally unable to pay its debts as they mature.mature or when its debts exceed its assets. Member States shall set out the conditions under which a microenterprise or SME is deemed to be generally unable to pay its debts as they mature and ensure that these conditions are clear, simple and easily ascertainable by the microenterprise or SME concerned.

Or. en

Amendment 5228

Proposal for a directive

Member States shall ensure that in simplified winding-up proceedings an insolvency practitioner may only be appointed if both of the following conditions are met:

Member States shall ensure that in simplified winding-up proceedings the debtor, a creditor or a group of creditors may request that an insolvency practitioner is not appointed provided that the microenterprise or SME has an up-to-date current balance sheet. The request needs to demonstrate thatif the microenterprise or SME has submitted its most recent required annual statement to thefollowing relevantconditions stateare authorities.met:

Or. en

Amendment 5329

Proposal for a directive

(a) the debtor, a creditor or a group of creditors requests such an appointment;

deleted

(a) the microenterprise has a current balance sheet;

Or. en

Amendment 5430

Proposal for a directive

(b) the costs of the intervention of the insolvency practitioner can be funded by the insolvency estate or by the party that requested the appointment.

deleted

(b) the microenterprise has an up-to-date accounting system;

Or. en

Amendment 55

Proposal for a directive

Article 39 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

(1a) The lack of funding by the insolvency estate or by the party that requested the appointment shall not constitute a reason for requesting that an insolvency practitioner is not appointed.

Or. en

Amendment 56

Proposal for a directive

Article 41 – paragraph 1

Text proposed by the Commission

Amendment

1. Member States shall ensure that insolvent microenterprises can submit a request for the opening of simplified winding-up proceedings to a competent authority.

1. Member States shall ensure that insolvent microenterprises and SME can submit a request for the opening of simplified winding-up proceedings to a competent authority.

Or. en

Amendment 57

Proposal for a directive

Article 41 – paragraph 2

Text proposed by the Commission

Amendment

2. Member States shall ensure that any creditor of an insolvent microenterprise can submit a request for the opening of simplified winding-up proceedings against the microenterprise to a competent authority. The microenterprise concerned shall be given the opportunity to respond to the request, by contesting or consenting to it.

2. Member States shall ensure that any creditor of an insolvent microenterprise or SME can submit a request for the opening of simplified winding-up proceedings against the microenterprise or SME to a competent authority. The microenterprise or SME concerned shall be given the opportunity to respond to the request, by contesting or consenting to it.

Or. en

Amendment 58

Proposal for a directive

Article 41 – paragraph 3

Text proposed by the Commission

Amendment

3. Member States shall ensure that microenterprises can submit a request for the opening of simplified winding-up proceedings using a standard form.

3. Member States shall ensure that microenterprises and SMEs can submit a request for the opening of simplified winding-up proceedings using a standard form.

Or. en

Amendment 59

Proposal for a directive

Article 41 – paragraph 4 – point a

Text proposed by the Commission

Amendment

(a) if the microenterprise is a legal person, the debtor’s name, registration number, registered office or, if different, postal address;

(a) if the microenterprise or SME is a legal person, the debtor’s name, registration number, registered office or, if different, postal address;

Or. en

Amendment 60

Proposal for a directive

Article 41 – paragraph 4 – point b

Text proposed by the Commission

Amendment

(b) if the microenterprise is an entrepreneur, the debtor’s name, registration number, if any, and postal address or, where the address is protected, the debtor's place and date of birth;

(b) if the microenterprise or SME is an entrepreneur, the debtor’s name, registration number, if any, and postal address or, where the address is protected, the debtor's place and date of birth;

Or. en

Amendment 61

Proposal for a directive

Article 41 – paragraph 4 – point c

Text proposed by the Commission

Amendment

(c) a list of the assets of the microenterprise;

(c) a list of the assets of the microenterprise or SME;

Or. en

Amendment 6231

Proposal for a directive

Article 4139 – paragraph 41 – point db a (new)

Text proposed by the Commission

Amendment

(d) name, address or other contact details of creditors of the microenterprise, as known to the microenterprise at the time of the submission of the request,

(ba) the microenterprise has an asset list;

(d) name, address or other contact details of creditors of the microenterprise or SME, as known to the microenterprise or SME at the time of the submission of the request,

(bb) the microenterprise has an up-to-date list of creditors;

(bc) the microenterprise has met payments on taxes and social security contributions.

Or. en

Amendment 6332

Proposal for a directive

Article 4139 – paragraph 4 –1 pointa e(new)

Text proposed by the Commission

Amendment

(e) the list of the claims against the microenterprise and, for each claim, its amount specifying the principal and, where applicable, interest and the date on which it arose and the date on which it became due, if different;

The lack of funding by the insolvency estate or by the party that requested the appointment shall not constitute a reason for requesting that an insolvency practitioner is not appointed.

(e) the list of the claims against the microenterprise or SME and, for each claim, its amount specifying the principal and, where applicable, interest and the date on which it arose and the date on which it became due, if different;

Or. en

Amendment 6433

Proposal for a directive

Amendment

(e a)(ea) a list with all commercial transactions in the period of six months preceding the request for the opening of simplified winding-up proceedings;procedings;

Or. en

Amendment 6534

Proposal for a directive

Or. en

Amendment 6635

Proposal for a directive

Article 41 – paragraph 6

Text proposed by the Commission

Amendment

6. Member States shall ensure that when the request for opening simplified winding-up proceedings is submitted by a creditor, and the microenterprise expressed its consent to the opening of the proceedings, the microenterprise is required to submit the information listed in paragraph 4 together with the response referred to in paragraph 2 of this Article, where available.

6. Member States shall ensure that when the request for opening simplified winding-up proceedings is submitted by a creditor, and the microenterprise or SME expressed its consent to the opening of the proceedings, the microenterprise or SME is required to submit the information listed in paragraph 4 together with the response referred to in paragraph 2 of this Article, where available.

Or. en

Amendment 67

Proposal for a directive

Article 41 – paragraph 7

Text proposed by the Commission

Amendment

7. Member States shall ensure that when the request for opening simplified winding-up proceedings is submitted by a creditor and the competent authority opens such proceedings despite the microenterprise contesting or not responding to the request the microenterprise is required to submit the information listed in paragraph 4 of this Article no later than two weeks following the receipt of the notice of opening.

7. Member States shall ensure that when the request for opening simplified winding-up proceedings is submitted by a creditor and the competent authority opens such proceedings despite the microenterprise or SME contesting or not responding to the request the microenterprise or SME is required to submit the information listed in paragraph 4 of this Article no later than two weeks following the receipt of the notice of opening.

Or. en

Amendment 68

Proposal for a directive

Article 42 – paragraph 2 – point a

Text proposed by the Commission

Amendment

(a) the debtor is not a microenterprise;

7(a) the debtor is not a microenterprise or a SME;

Or. en

Amendment 69

Proposal for a directive

Article 42 – paragraph 3

Text proposed by the Commission

Amendment

3. Member States shall ensure that the microenterprise, or any creditor of the microenterprise may challenge before a court the decision on the request for the opening of simplified winding-up proceedings. The challenge has no suspensive effect on the opening of simplified winding-up proceedings and shall be dealt with promptly by the court.

3. Member States shall ensure that the microenterprise, SME or any creditor of the microenterprise or SME may challenge before a court the decision on the request for the opening of simplified winding-up proceedings. The challenge has no suspensive effect on the opening of simplified winding-up proceedings and shall be dealt with promptly by the court.

Or. en

Amendment 70

Proposal for a directive

Amendment

2 a.2a. Paragraph 1 shall not apply to employees’ claims. By way of derogation from the first subparagraph, Member States may apply paragraph 1 to employees’ claims if, and to the extent that, Member States ensure that the payment of such claims is guaranteed in preventive restructuring frameworks at a similar level of protection.

Or. en

Amendment 7136

Proposal for a directive

Article 4847 – paragraph 21 – point a

Text proposed by the Commission

Amendment

2. The assets of the insolvency estate shall include assets in the possession of the debtor at the time of the opening of simplified winding-up proceedings, assets acquired after the submission of the request for opening of such proceedings and assets recovered through avoidance actions or other actions.

(a) the pursuit and enforcement of avoidance actions shall not be mandatory, but shall be left to the discretion of creditors or, when applicable, of the insolvency practitioner;

2. The assets of the insolvency estate shall include assets in the possession of the debtor at the time of the opening of simplified winding-up proceedings, assets acquired after the submission of the request for opening of such proceedings and assets recovered through avoidance actions or other actions. This paragraph is without prejudice to assets that are temporarily in possession of the debtor in execution of a contract for the lease of goods.

(a) the pursuit and enforcement of avoidance actions shall not be mandatory, but shall be left to the discretion of creditors or, when appointed, of the insolvency practitioner;

Or. en

Amendment 7237

Proposal for a directive

1. Member States shall ensure that in simplified winding-up proceedings once the insolvency estate has been established and the list of claims against the debtor has been determined, the competent authority:

1. Member States shall ensure that in simplified winding-up proceedings once the insolvency estate has been established and the list of claims against the debtor has been determined, the competent authority, oror, where appointed, the insolvency practitioner:

Or. en

Amendment 7338

Proposal for a directive

3. Member States shall ensure that, where the competent authority proceeds with the realisation of the debtor’s assets as referred to in paragraph 1, point (a), the competent authority also specifies the means of realisation of the assets. Other means than the sale of the debtor’s assets through an electronic public auction may only be selected, if their use is deemed more appropriate in light of the nature of the assets or the circumstances of the proceedings.

3. Member States shall ensure that, where the competent authority proceeds with the realisation of the debtor’s assets as referred to in paragraph 1, point (a), the competent authority, oror, where appointed, the insolvency practitioner also specifies the means of realisation of the assets. Other means than the sale of the debtor’s assets through an electronic public auction may only be selected, if their use is deemed more appropriate in light of the nature of the assets or the circumstances of the proceedings.

Or. en

Amendment 74

Proposal for a directive

Article 58 – paragraph 1

Text proposed by the Commission

Amendment

1. Member States shall ensure that a creditors’ committee is established only if the general meeting of creditors so decides.

1. Member States shall ensure that a creditors’ committee is established only if the general meeting of creditors so decides and in accordance with national law.

Or. en

Amendment 7539

Proposal for a directive

Article 59 – paragraph 13

Text proposed by the Commission

Amendment

1.3. Member States shall ensure that the appointed members of the creditors’ committee are appointed eitherfairly atreflect the generaldifferent meetinginterests of creditors or by decision of the court, within 30 days from the date of the opening of the proceedings as referred to in Article 24(2), point (a) of Regulation (EU)groups 2015/848.thereof.

1.3. Member States shall ensure that the appointed members of the creditors’ committee are appointed eitherfairly atreflect the generaldifferent meetinginterests of creditors or by decision of the court, withoutgroups unduethereof. delayMember fromStates theshall dateensure ofthat thealso openingrepresentatives of the proceedings as referred to in Article 24(2),employees pointare (a)members of Regulationthe (EU)creditors’ 2015/848.committee.

Or. en

Amendment 7640

Proposal for a directive

Article 59 – paragraph 3

Article 61

Text proposed by the Commission

Amendment

3. Member States shall ensure that the appointed members of the creditors’ committee fairly reflect the different interests of creditors or groups thereof.

Article 61

3. Member States may ensure that the appointed members of the creditors’ committee fairly reflect the different interests of creditors or groups thereof.

deleted

Number of members

Member States shall ensure that the number of members composing the creditors’ committee is at least 3 and does not exceed 7.

Or. en

Amendment 7741

Proposal for a directive

Article 6163 – paragraph 12 – point a

Text proposed by the Commission

Amendment

Member States shall ensure that the number of members composing the creditors’ committee is at least 3 and does not exceed 7.

(a) eligibility to attend and participate in the creditors’ committee’s meetings;;

deleted

(a) eligibility to attend and participate in the creditors’ committee’s meetings;

Or. en

Amendment 7842

Proposal for a directive

Member States shall ensure that the creditors’ committee’s function is to ensure that in the conduct of the insolvency proceedings the creditors’ interests are protected and individual creditors are involved.

Member States shall ensure that the creditors’ committee’s function is to ensure that in the conduct of the insolvency proceedings the workers’ and creditors’ interests are protected and individual creditorscreditors, as well as including employeesemployees' or their representatives are involved.

Or. en

Amendment 7943

Proposal for a directive

Data reporting

Or. en

1. The Commission, in consultation with the European Banking Authority, shall offer support to Member States to enhance and harmonise data reporting in order to allow for a regular assessment of the effectiveness of national insolvency proceedings.

Amendment 80

2. Two years after entry into force and thereafter, the Commission shall, in cooperation with the European Banking Authority, draw up an annual report regular on insolvency cases under the relevant insolvency regulation so that the effectiveness of the system established can be assessed.

Proposal for a directive

Article 69 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

1 a. The Commission, in consultation with the European Banking Authority, shall offer support to Member States to enhance and harmonise data reporting in order to allow for a regular assessment of the effectiveness of national insolvency proceedings.

Or. en

Amendment 81

Proposal for a directive

Article 69 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

2 a. Two years after entry into force and thereafter, the Commission shall, in cooperation with the European Banking Authority, draw up an annual report regular on insolvency cases under the relevant insolvency regulation so that the effectiveness of the system established can be assessed.

Or. en