Legal provisions of COM(2022)702 - Proposal for a directive harmonising certain aspects of insolvency law - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
dossier | COM(2022)702 - Proposal for a directive harmonising certain aspects of insolvency law. |
---|---|
document | COM(2022)702 ![]() |
date | December 7, 2022 |
Title I
GENERAL PROVISIONS
Contents
- Article 1 - Subject matter and scope
- Article 2 - Definitions
- Article 3 - Relevant point in time in relation to close relatedness
- Article 4 - General prerequisites for avoidance actions
- Article 5 - Relationship to national provisions
- Article 6 - Preferences
- Article 7 - Legal acts against no or a manifestly inadequate consideration
- Article 8 - Legal acts intentionally detrimental to creditors
- Article 9 - General consequences
- Article 10 - Consequences for the party which benefitted from the legal act that has been declared void
- Article 11 - Liability of third parties
- Article 12 - Relation to other instruments
- Article 13 - Designated courts
- Article 14 - Access to and searches of bank account information by designated courts
- Article 15 - Conditions for access and for searches by designated courts
- Article 16 - Monitoring access and searches by designated courts
- Article 17 - Access by insolvency practitioners to beneficial ownership information
- Article 18 - Access by insolvency practitioners to national asset registers
- Article 19 - Pre-pack proceedings
- Article 20 - Relationship with other Union legal acts
- Article 21 - Jurisdiction in pre-pack proceedings
- Article 22 - The monitor
- Article 23 - Stay of individual enforcement actions
- Article 24 - Principles applicable to the sale process
- Article 25 - Appointment of the insolvency practitioner
- Article 26 - Authorisation of the sale of the debtor’s business or part thereof
- Article 27 - Assignment or termination of executory contracts
- Article 28 - Debts and liabilities of the business acquired via the pre-pack proceedings
- Article 29 - Specific rules on the suspensive effects of appeals
- Article 30 - Criteria to select the best offer
- Article 31 - Civil liability of the monitor and of the insolvency practitioner
- Article 32 - Parties closely related to the debtor in the sale process
- Article 33 - Measures to maximize the value of the debtor’s business or part thereof
- Article 34 - Protection of the interests of the creditors
- Article 35 - Impact of competition law procedures on the timing or the successful outcome of the bid
- Article 36 - Duty to request the opening of insolvency proceedings
- Article 37 - Directors' civil liability
- Article 38 - Rules on winding-up of microenterprises
- Article 39 - Insolvency practitioner
- Article 40 - Means of communication
- Article 41 - Request for the opening of simplified winding-up proceedings
- Article 42 - Decision on the request for the opening of simplified winding-up proceedings
- Article 43 - Debtor in possession
- Article 44 - Stay of individual enforcement actions
- Article 45 - Publicity of the opening of simplified winding-up proceedings
- Article 46 - Lodgement and admission of claims
- Article 47 - Avoidance actions
- Article 48 - Establishment of the insolvency estate
- Article 49 - Decision on the procedure to be used
- Article 50 - Electronic auction systems for the sale of the assets of the debtor
- Article 51 - Interconnection of the electronic auction systems
- Article 52 - Costs of establishing and interconnecting electronic auction systems
- Article 53 - Responsibilities of the Commission in connection with the processing of personal data in the system of interconnection of electronic auction platforms
- Article 54 - Sale of the assets by electronic auction
- Article 55 - Decision on the closure of the simplified winding-up proceedings
- Article 56 - Access to discharge
- Article 57 - Treatment of personal guarantees provided for business-related debts
- Article 58 - Establishment of the creditors' committee
- Article 59 - Appointment of the members of the creditors’ committee
- Article 60 - Duty of creditors as members of the creditors' committee
- Article 61 - Number of members
- Article 62 - Removal of a member and replacement
- Article 63 - Working method of the creditors' committee
- Article 64 - Function, rights, duties and powers of the creditors' committee
- Article 65 - Expenses and remuneration
- Article 66 - Liability
- Article 67 - Appeal
- Article 68 - Key information factsheet
- Article 69 - Committee
- Article 70 - Review
- Article 71 - Transposition
- Article 72 - Entry into force
- Article 73 - Addressees
Article 1 - Subject matter and scope
(a)avoidance actions;
(b)the tracing of assets belonging to the insolvency estate;
(c)pre-pack proceedings;
(d)the duty of directors to submit a request for the opening of insolvency proceedings;
(e)simplified winding-up proceedings for microenterprises;
(f)creditors’ committees;
(g)the drawing-up of a key information factsheet by Member States on certain elements of their national law on insolvency proceedings.
2. This Directive does not apply to proceedings referred to in paragraph 1 of this Article that concern debtors that are:
(a)insurance undertakings or reinsurance undertakings as defined in Article 13 points (1) and (4), of Directive 2009/138/EC of the European Parliament and of the Council;
(b)credit institutions as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council;
(c)investment firms or collective investment undertakings as defined in Article 4(1), points (2) and (7), of Regulation (EU) No 575/2013;
(d)central counterparties as defined in Article 2, point (1), of Regulation (EU) No 648/2012 of the European Parliament and of the Council;
(e)central securities depositories as defined in Article 2(1), point (1) of Regulation (EU) No 909/2014 of the European Parliament and of the Council;
(f)other financial institutions and entities listed in Article 1(1), first subparagraph of Directive 2014/59/EU of the European Parliament and of the Council;
(g)public bodies under national law;
(h)natural persons, except for entrepreneurs and, with regard to debt discharge procedures, those founders, owners or members of unlimited liability microenterprise debtors who are personally liable for the debts of the debtor.
Article 2 - Definitions
(a)‘insolvency practitioner’ means a practitioner appointed by a judicial or administrative authority in procedures concerning restructuring, insolvency and discharge of debt as referred to in Article 26 Directive (EU) 2019/1023;
(b)‘court’ means the judicial body of a Member State;
(c)‘competent authority’ means a judicial or administrative authority of a Member State that is responsible for conduct or oversight, or both, of simplified winding-up proceedings, in accordance with Title VI of this Directive;
(d)‘centralised bank account registries’ means the centralised automated mechanisms, such as central registries or central electronic data retrieval systems, put in place in accordance with Article 32a(1) of Directive (EU) 2015/849;
(e)‘beneficial ownership register’ means national central registers on beneficial ownership information referred to in Articles 30 and 31 of Directive (EU) 2015/849;
(f)‘legal act’ means any human behaviour, including an omission, producing a legal effect;
(g)‘executory contract’ means a contract between a debtor and one or more counterparties under which the parties still have obligations to perform at the time of the opening of insolvency proceedings in the liquidation phase in Title IV;
(h)‘best-interest-of-creditors test’ means the test whereby no creditor would be worse off under a liquidation in pre-pack proceedings than such a creditor would be if the normal ranking of liquidation priorities were applied in the event of a piecemeal liquidation;
(i)‘interim financing’ means any new financial assistance, provided by an existing or a new creditor, that includes, as a minimum, financial assistance during pre-pack proceedings, and that is reasonable and immediately necessary for the debtor’s business or part thereof to continue operating, or to preserve or enhance the value of that business;
(j)‘microenterprise’ means a microenterprise within the meaning of the Annex to Commission Recommendation 2003/361/EC;
(k)‘unlimited liability microenterprise’ means a microenterprise with or without separate legal personality and without limited liability protection of any of its founders, owners or members;
(l)‘entrepreneur’ means an entrepreneur as defined in Article 2(1), point (9) of Directive (EU) 2019/1023;
(m)‘full discharge of debt’ means the situation in which either i) the enforcement of outstanding dischargeable debts against entrepreneurs or against those individuals who are founders, owners or members of an unlimited liability microenterprise and are personally liable for the debts of the microenterprise is precluded or ii) outstanding dischargeable debts as such are cancelled, as part of simplified winding-up proceedings;
(n)‘repayment plan’ means a programme of payments of specified amounts on specified dates to creditors by a natural person benefiting from a full discharge of debt, or a plan setting out periodic transfers to creditors of a certain part of the disposable income of the natural person concerned during the discharge period;
(o)‘creditors’ committee’ means a representative body of creditors appointed in accordance with the applicable law on insolvency proceedings with consultative and other powers as specified in that law;
(p)‘pre-pack proceedings’ means expedited liquidation proceedings that allow for the sale of the business of the debtor, in whole or in part, as a going-concern to the best bidder, with a view to the liquidation of the assets of the debtor as a result of the established insolvency of the debtor;
(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.
Where the debtor is a natural person, closely related parties shall include in particular:
(i) the spouse or partner of the debtor;
(ii) ascendants, descendants, and siblings of the debtor, or of the spouse or partner, and the spouses or partners of these persons;
(iii) persons living in the household of the debtor;
(iv) persons who are working for the debtor under a contract of employment with access to non-public information on the affairs of the debtor, or otherwise performing tasks through which they have access to non-public information on the affairs of the debtor, including advisers, accountants or notaries;
(v) legal entities in which the debtor or one of the persons referred to in points (i) to (iv) of this subparagraph is a member of the administrative, management or supervisory bodies or performs duties which provide for access to non-public information on the affairs of the debtor.
Where the debtor is a legal entity, closely related parties shall include in particular:
(i) any member of the administrative, management or supervisory bodies of the debtor;
(ii) equity holders with a controlling interest in the debtor;
(iii) persons which perform functions similar to those performed by persons under point (i);
(iv) persons which are closely related in accordance with the second subparagraph to the persons listed in points (i), (ii) and (iii) of this subparagraph.
Article 3 - Relevant point in time in relation to close relatedness
(a)for the purposes of Title II, the day when the legal act subject to an avoidance action was perfected or three months prior to the perfection of the legal act;
(b)for the purposes of Title IV, the day when the preparation phase starts or three months prior to the start of the preparation phase.
Title II
AVOIDANCE ACTIONS
Chapter 1
General provisions regarding avoidance actions
Article 4 - General prerequisites for avoidance actions
Article 5 - Relationship to national provisions
Chapter 2
Specific conditions for avoidance actions
Article 6 - Preferences
(a)within three months prior to the submission of the request for the opening of insolvency proceedings, under the condition that the debtor was unable to pay its mature debts; or
(b)after the submission of the request for the opening of insolvency proceedings.
Where several persons have submitted a request for the opening of insolvency proceedings against the same debtor, the point in time when the first admissible request is submitted shall be considered the beginning of the three-month period referred to in the first subparagraph, point (a).
2. If a due claim of a creditor was satisfied or secured in the owed manner, Member States shall ensure that the legal act can be declared void only if:
(a)the conditions laid down in paragraph 1 are met; and
(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.
The creditor’s knowledge referred to in the first subparagraph, point (b), shall be presumed if the creditor was a party closely related to the debtor.
3. By way of derogation from paragraphs 1 and 2, Member States shall ensure that the following legal acts cannot be declared void:
(a)legal acts performed directly against fair consideration to the benefit of the insolvency estate;
(b)payments on bills of exchange or cheques where the law that governs bills of exchange or cheques bars the recipient's claims arising from the bill or cheque against other bill or cheque debtors such as endorsers, the drawer, or drawee if it refuses the debtor's payment;
(c)legal acts that are not subject to avoidance actions in accordance with Directive 98/26/EC and Directive 2002/47/EC.
Member States shall ensure that where payments on bills of exchange or cheques are concerned as referred to in the first subparagraph, point (b), the amount paid on the bill or cheque shall be restituted by the last endorser or, if the latter endorsed the bill on account of a third party, by such party if the last endorser or the third party 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 at the moment of endorsing the bill or having it endorsed. This knowledge is presumed if the last endorser or the third party was a party closely related to the debtor.
Article 7 - Legal acts against no or a manifestly inadequate consideration
2. Paragraph 1 shall not apply to gifts and donations of symbolic value.
3. Where several persons have submitted a request for the opening of insolvency proceedings against the same debtor, the point in time when the first admissible request is submitted shall be considered the beginning of the one-year period referred to in paragraph 1.
Article 8 - Legal acts intentionally detrimental to creditors
(a)those acts were perfected either within a time period of four years prior to the submission of the request for the opening of insolvency proceedings or after the submission of such request;
(b)the other party to the legal act knew or should have known of the debtor’s intent to cause a detriment to the general body of creditors.
The knowledge referred to in the first subparagraph, point (b), shall be presumed if the other party to the legal act was a party closely related to the debtor.
2. Where several persons have submitted a request for the opening of insolvency proceedings against the same debtor, the point in time when the first admissible request is submitted shall be considered the beginning of the four-year period referred to in paragraph 1, first subparagraph, point (a).
Chapter 3
Consequences of avoidance actions
Article 9 - General consequences
2. Member States shall ensure that the party which benefitted from the legal act that has been declared void is obliged to compensate in full the insolvency estate concerned for the detriment caused to creditors by that legal act.
The fact that the enrichment resulting from the legal act that has been declared void is not available anymore in the property of the party which benefited from that legal act (‘lapse of enrichment’) can only be invoked if that party was neither aware, nor should have been aware, of the circumstances on which the avoidance action is based.
3. Member States shall ensure that the limitation period for all claims resulting from the legal act that can be declared void against the other party is three years from the date of the opening of insolvency proceedings.
4. Member States shall ensure that a claim to obtain full compensation pursuant to paragraph 2, first subparagraph, may be assigned to a creditor or a third party.
5. Member States shall ensure that the party that has been obliged to compensate the insolvency estate pursuant to paragraph 2, first subparagraph, cannot set-off this obligation with its claims against the insolvency estate.
6. This Article is without prejudice to actions based on general civil and commercial law for compensation of damages suffered by creditors as a result of a legal act that can be declared void.
Article 10 - Consequences for the party which benefitted from the legal act that has been declared void
2. Member States shall ensure that any counter-performance of the party which benefitted from the legal act that has been declared void performed after or in an instant exchange for the performance of the debtor under that legal act shall be refunded from the insolvency estate to the extent that the counter-performance is still available in the estate in a form that can be distinguished from the rest of the insolvency estate or the insolvency estate is still enriched by its value.
In all cases not covered by the first subparagraph, the party which benefitted from the legal act that has been declared void may file claims for the compensation of the counter-performance. For the purposes of the ranking of claims in insolvency proceedings, this claim shall be deemed to have arisen before the opening of insolvency proceedings
Article 11 - Liability of third parties
2. Member States shall ensure that the rights laid down in Article 9 are also enforceable against any individual successor of the other party to the legal act that has been declared void if one of the following conditions is fulfilled:
(a)the successor acquired the asset against no or a manifestly inadequate consideration;
(b)the successor knew or should have known the circumstances on which the avoidance action is based.
The knowledge referred to in the first subparagraph, point (b), shall be presumed if the individual successor is a party closely related to the party which benefitted from the legal act that has been declared void.
Article 12 - Relation to other instruments
Title III
TRACING ASSETS BELONGING TO THE INSOLVENCY ESTATE
Chapter 1
Access to bank account information by designated courts
Article 13 - Designated courts
2. Each Member State shall notify the Commission of its designated courts by [6 months from transposition date], and shall notify the Commission of any amendment thereto. The Commission shall publish the notifications in the Official Journal of the European Union.
Article 14 - Access to and searches of bank account information by designated courts
2. Member States shall ensure that, upon request of the insolvency practitioner appointed in ongoing insolvency proceedings, the designated courts have the power to access and search, directly and immediately, bank account information in other Member States available through the bank account registers (BAR) single access point set up pursuant to Article XX of Directive (EU) YYYY/XX [OP: the new Anti-Money Laundering Directive] where necessary for the purposes of identifying and tracing assets belonging to the insolvency estate of the debtor in that proceedings, including those subject to avoidance actions.
3. The additional information that Member States consider essential and include in the centralised bank account registries pursuant to Article 32a(4) of Directive (EU) 2015/849 shall not be accessible and searchable by designated courts.
4. For the purpose of paragraphs 1 and 2, access and searches shall be considered to be direct and immediate, inter alia, where the national authorities operating the central bank account registries transmit the bank account information expeditiously by an automated mechanism to the designated courts, provided that no intermediary institution is able to interfere with the requested data or the information to be provided.
Article 15 - Conditions for access and for searches by designated courts
2. Member States shall ensure that:
(a)the staff of the designated courts maintain high professional standards of confidentiality and data protection, and that they are of high integrity and are appropriately skilled;
(b)technical and organisational measures are in place to ensure the security of the data to high technological standards for the purposes of the exercise by designated courts of the power to access and search bank account information in accordance with Article 14.
Article 16 - Monitoring access and searches by designated courts
(a)the case reference number;
(b)the date and time of the query or search;
(c)the type of data used to launch the query or search;
(d)the unique identifier of the results;
(e)the name of the designated court consulting the registry;
(f)the unique user identifier of the staff member of the designated court who made the query or performed the search and, where applicable, of the judge who ordered the query or search and, as far as possible, the unique user identifier of the recipient of the results of the query or search.
2. The authorities operating the centralised bank account registries shall check the logs referred to in paragraph 1 regularly.
3. The logs referred to in paragraph 1 shall be used only for the monitoring of compliance with this Directive and obligations stemming from the applicable Union legal instruments on data protection. The monitoring shall include verifying the admissibility of a request and the lawfulness of personal data processing, and whether the integrity and confidentiality of personal data is ensured. The logs shall be protected by appropriate measures against unauthorised access and shall be erased five years after their creation, unless they are required for monitoring procedures that are ongoing.
Chapter 2
Access by insolvency practitioners to beneficial ownership information
Article 17 - Access by insolvency practitioners to beneficial ownership information
2. Access to the information by the insolvency practitioners in accordance with paragraph 1 of this Article shall constitute a legitimate interest, whenever it is necessary for identifying and tracing assets belonging to the insolvency estate of the debtor in ongoing insolvency proceedings and is limited to the following information:
(a)the name, the month, the year of birth, the country of residence and the nationality of the legal owner;
(b)the nature and the extent of the beneficial interest held.
Chapter 3
Access by insolvency practitioners to national asset registers
Article 18 - Access by insolvency practitioners to national asset registers
2. With respect to access to the national asset registers listed in the Annex, every Member State shall ensure that the insolvency practitioners appointed in another Member State are not subject to access conditions that are de jure or de facto less favourable than the conditions granted to the insolvency practitioners appointed in that Member State.
Title IV
PRE-PACK PROCEEDINGS
Chapter 1
General provisions
Article 19 - Pre-pack proceedings
(a)the preparation phase, which aims at finding an appropriate buyer for the debtor’s business or part thereof;
(b)the liquidation phase, which aims at approving and executing the sale of the debtor’s business or part thereof and at distributing the proceeds to the creditors.
2. Pre-pack proceedings shall comply with the conditions set out in this Title. As regards all other matters, including the ranking of claims and the rules on distribution of proceeds, Member States shall apply national provisions on winding-up proceedings, provided that they are compatible with Union law, including the rules laid down in this Title.
Article 20 - Relationship with other Union legal acts
Monitors referred to in Article 22 may be considered to be insolvency practitioners as defined in Article 2, point (5), of Regulation (EU) 2015/848.
2. For the purposes of Article 5(1) of Council Directive 2001/23/EC 40 , the liquidation phase shall be considered to be bankruptcy or insolvency proceedings instituted with a view to the liquidation of the assets of the transferor under the supervision of a competent public authority.
Article 21 - Jurisdiction in pre-pack proceedings
Chapter 2
Preparation Phase
Article 22 - The monitor
The appointment of the monitor shall start the preparation phase referred to in Article 19 , paragraph 1.
2. Member States shall ensure that the monitor:
(a)documents and reports each step of the sale process;
(b)justifies why it considers that the sale process is competitive, transparent, fair and meets market standards;
(c)recommends the best bidder as the pre-pack acquirer, in accordance with Article 30;
(d)states whether it considers that the best bid does not constitute a manifest breach of the best-interest-of-creditors test.
Actions by the monitor listed in the first subparagraph shall be done in writing, be made available in digital format and in a timely manner to all parties involved in the preparation phase.
3. Member States shall ensure that only those persons who fulfil both of the following conditions can be appointed as monitor:
(a)they satisfy the eligibility criteria applicable to insolvency practitioners in the Member State where the pre-pack proceedings are opened;
(b)they may be actually appointed as insolvency practitioners in the subsequent liquidation phase.
4. Member States shall ensure that, in the course of the preparation phase, the debtor remains in control of its assets and the day-to-day operation of the business.
5. Member States shall ensure that the remuneration of the monitor is paid:
(a)by the debtor where no subsequent liquidation phase ensues;
(b)by the insolvency estate as a preferential administrative expense where the liquidation phase ensues.
Article 23 - Stay of individual enforcement actions
Article 24 - Principles applicable to the sale process
2. Where the sale process only produces one binding offer, that offer shall be deemed to reflect the business market price.
3. Member States may depart from paragraph 1 only where the court runs a public auction in the liquidation phase in accordance with Article 26. In this case, Article 22(2), point (b) shall not apply.
Chapter 3
Liquidation Phase
Article 25 - Appointment of the insolvency practitioner
Article 26 - Authorisation of the sale of the debtor’s business or part thereof
The court shall not authorise the sale where the requirements laid down in Article 22 (2) and (3) and Article 24 (1) and (2) are not met. Member States shall ensure that, in the latter case, the court continues with the insolvency proceedings.
2. In case Member States apply Article 24(3), the public auction referred to in that provision shall last no longer than four weeks and shall be initiated within two weeks as of the opening of the liquidation phase. The offer selected by the monitor shall be used as the initial bid in the public auction. Member States shall ensure that the protections granted to the initial bidder in the preparation phase, such as expense reimbursement or break-up fees, are commensurate and proportionate, and do not deter potentially interested parties from bidding in the liquidation phase.
Article 27 - Assignment or termination of executory contracts
The first subparagraph shall not apply if the acquirer of the debtor’s business or part thereof is a competitor to the debtor’s counterparty or counterparties.
2. Member States shall ensure that the court may decide to terminate the executory contracts referred to in paragraph 1, first subparagraph, provided that one of the following conditions applies:
(a)the termination is in the interest of the debtor’s business or part thereof;
(b)the executory contract contains public service obligations for which the counterparty is a public authority and the acquirer of the debtor’s business or part thereof does not meet the technical and legal obligations to carry out the services provided for in such contract.
Point (a) of the first subparagraph shall not apply to executory contracts relating to licenses of intellectual and industrial property rights.
3. The law applicable to the assignment or to the termination of executory contracts shall be the law of the Member State where the liquidation phase has been opened.
Article 28 - Debts and liabilities of the business acquired via the pre-pack proceedings
Article 29 - Specific rules on the suspensive effects of appeals
2. Member States shall ensure that the court hearing the appeal has discretion to exempt a natural person appellant, totally or partially, from the provision of a security if it considers such exemption appropriate in light of the circumstances of the given case.
Chapter 4
Provisions relevant to both phases of the pre-pack proceedings
Article 30 - Criteria to select the best offer
Article 31 - Civil liability of the monitor and of the insolvency practitioner
Article 32 - Parties closely related to the debtor in the sale process
(a)they disclose in a timely manner to the monitor and to the court their relation to the debtor;
(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;
(c)parties not closely related to the debtor are granted sufficient time to make an offer.
Member States may provide that where it is proved that the disclosure duty referred to in the first subparagraph, point (a), was breached, the court revokes the benefits referred to in Article 28 .
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.
Article 33 - Measures to maximize the value of the debtor’s business or part thereof
(a)the monitor or the insolvency practitioner takes the necessary steps to obtain interim financing at the lowest possible cost;
(b)grantors of interim financing are entitled to receive payment with priority in the context of subsequent insolvency procedures in relation to other creditors that would otherwise have superior or equal claims;
(c)security interests over the sale proceeds may be granted to providers of interim financing in order to secure reimbursement;
(d)interim financing is eligible to be set-off against the price to be disbursed under the adjudicated offer, when provided by interested bidders.
2. Member States shall ensure that no pre-emption rights are conceded to bidders.
3. Member States shall ensure that, where security interests encumber the business subject to the pre-pack proceedings, creditors who are the beneficiaries of those security interests may offset their claims in their bid only provided that the value of those claims is significantly below market value of the business.
Article 34 - Protection of the interests of the creditors
Member States shall lay down detailed rules in order to ensure the effectiveness of the right to be heard under the first subparagraph.
2. By way of derogation from paragraph 1, Member States may by law not grant the right to be heard to:
(a)the creditors or holders of equity who would not receive any payment or keep any interest according to the normal ranking of liquidation priorities under national law;
(b)the creditors of executory contracts whose claims against the debtor arose before the authorisation of the sale of the debtor’s business or part thereof and are supposed to be paid in full under the terms of the pre-pack offer.
3. Member States shall ensure that security interests are released in pre-pack proceedings under the same requirements that would apply in winding-up proceedings.
4. Member States in which consent from holders of secured claims is required in winding-up proceedings for the release of security interests may depart from requiring such consent, provided that the security interests relate to assets that are necessary for the continuation of the day-to-day operations of the debtor’s business or part thereof and one of the following conditions is fulfilled:
(a)creditors of secured claims fail to prove that the pre-pack offer does not satisfy the best-interest-of-creditors test;
(b)creditors of secured claims have not filed (directly or through a third party) an alternative binding acquisition offer that allows the insolvency estate to obtain a better recovery than with the proposed pre-pack offer.
Article 35 - Impact of competition law procedures on the timing or the successful outcome of the bid
2. Member States shall ensure that the monitor may receive information on the applicable competition law procedures and their outcomes that may affect the timing or the successful outcome of the bid, in particular through the disclosure of information by the bidders or the provision of a waiver to exchange information with competition authorities, where applicable. In that regard, the monitor shall be made subject to a duty of full confidentiality.
3. Member States shall ensure that, where an offer entails an appreciable risk of a delay as referred to in paragraph 1, that offer may be disregarded, provided that both of the following conditions apply:
(a)such offer is not the only existing offer;
(b)the delay in the conclusion of the pre-pack business sale with the bidder concerned would result in a damage for the debtor’s business or part thereof.
Title V
DIRECTORS’ DUTY TO REQUEST THE OPENING OF INSOLVENCY PROCEEDINGS AND CIVIL LIABILITY
Article 36 - Duty to request the opening of insolvency proceedings
Article 37 - Directors' civil liability
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.
Title VI
WINDING-UP OF INSOLVENT MICROENTERPRISES
Chapter 1
General rules
Article 38 - Rules on winding-up of microenterprises
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.
3. The opening and conduct of simplified winding-up proceedings may not be denied on the ground that the debtor has no assets or its assets are not sufficient to cover the costs of the simplified winding-up proceedings.
4. Member States shall ensure that the costs of the simplified winding-up proceedings are covered in the situations set out in paragraph 3.
Article 39 - Insolvency practitioner
(a)the debtor, a creditor or a group of creditors requests such an appointment;
(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.
Article 40 - Means of communication
Chapter 2
Opening of simplified winding-up proceedings
Article 41 - Request for the opening of simplified winding-up proceedings
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.
3. Member States shall ensure that microenterprises can submit a request for the opening of simplified winding-up proceedings using a standard form.
4. The standard form referred to in paragraph 3 shall allow for the inclusion, among others, of the following information:
(a)if the microenterprise is a legal person, the debtor’s name, registration number, registered office or, if different, postal address;
(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;
(c)a list of the assets of the microenterprise;
(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,
(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;
(f)if security in rem or a reservation of title is alleged in respect of a certain claim and, if so, what assets are covered by the security interest.
5. The Commission shall establish the standard form referred to in paragraph 3 by way of implementing acts. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 69(2)
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.
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.
Article 42 - Decision on the request for the opening of simplified winding-up proceedings
2. The opening of simplified winding-up proceedings may be refused only if one or more of the following conditions is fulfilled:
(a)the debtor is not a microenterprise;
(b)the debtor is not insolvent pursuant to Article 38(2)of this Directive;
(c)the competent authority where the request was submitted has no jurisdiction over the case;
(d)the Member State where the request was submitted has no international jurisdiction over the case.
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.
Article 43 - Debtor in possession
2. Member States shall ensure that, where an insolvency practitioner is appointed, the competent authority specifies in the decision on the appointment whether the rights and duties to manage and dispose of the debtor’s assets are transferred to the insolvency practitioner.
3. Member States shall specify the circumstances in which the competent authority may, exceptionally, decide to remove the debtor’s right to manage and dispose of its assets. Such a decision must be based on a case-by-case assessment in view of all relevant elements of law and facts.
4. Member States shall ensure that, where the debtor no longer holds the right to manage and dispose of its assets and no insolvency practitioner is appointed, one of the following applies:
(a)any decision of the debtor to that effect becomes subject to the approval of the competent authority, or
(b)the competent authority entrusts the right to manage and dispose of the assets of the debtor to a creditor.
Article 44 - Stay of individual enforcement actions
2. Member States may provide that the competent authority excludes, upon request by the debtor or a creditor, a claim from the scope of the stay of individual enforcement actions where both of the following conditions are fulfilled:
(a)the enforcement is not likely to jeopardise the legitimate expectations of the general body of creditors and;
(b)the stay would unfairly prejudice the creditor of that claim.
Article 45 - Publicity of the opening of simplified winding-up proceedings
2. Member States shall ensure that the competent authority immediately informs the debtor and all known creditors, by individual notices, of the opening of simplified winding-up proceedings.
The notice shall include, in particular:
(a)the list of claims against the debtor as indicated by the debtor;
(b)an invitation to the creditor to lodge any claims not included in the list referred to in point (a) or to rectify any incorrect statement on those claims no later than 30 days upon the receipt of the notice;
(c)a statement to the effect that, without further action by the creditor, the claims included in the list referred to in point (a) will be considered as lodged by the creditor concerned.
Chapter 3
List of claims and establishment of the insolvency estate
Article 46 - Lodgement and admission of claims
(a)in its request for the opening of simplified winding-up proceedings;
(b)in its response to the request for the opening of such proceedings submitted by a creditor;
(c)in its submission pursuant to Article 41(7).
2. Member States shall ensure that any creditor may lodge claims not contained in the submissions referred to in paragraph 1 or make statements of objection or raise concern on claims included in one of that submissions, within 30 days from the publication of the date of the opening of simplified winding-up proceedings in the insolvency register or, in case of a known creditor, of the receipt of the individual notice referred to in Article 45 whichever is the latest.
3. Member States shall ensure that, in the absence of any objection or concern communicated by a creditor within the time period indicated in paragraph 2, a claim included in the submissions referred to in paragraph 1 is deemed to be undisputed and shall be definitively admitted as stated therein.
4. Member States shall ensure that the competent authority or, where appointed, the insolvency practitioner may admit or deny admission of claims lodged by a creditor, in addition to the claims referred to in paragraph 1, in accordance with paragraph 2 and the appropriate criteria defined by national law.
5. Member States shall ensure that the disputed claims are dealt with promptly either by the competent authority or by a court. The competent authority may decide to continue the simplified winding-up proceedings with respect to undisputed claims.
Article 47 - Avoidance 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;
(b)any decision by creditors not to commence avoidance actions shall not affect the liability of the debtor under civil or criminal law, where it is later discovered that the information communicated by the debtor about assets or liabilities was concealed or forged;
(c)the competent authority may convert simplified winding-up proceedings into standard insolvency proceedings, where the conduct of avoidance proceedings under simplified winding-up proceedings would not be possible due to the significance of the claims subject to avoidance proceedings in relation to the value of the insolvency estate, and due to the anticipated length of avoidance proceedings.
Article 48 - Establishment of the insolvency estate
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.
3. Member States shall ensure that, where the debtor is an entrepreneur, the competent authority or, if appointed, the insolvency practitioner specifies which assets are excluded from the insolvency estate and can therefore be retained by the debtor.
Chapter 4
Realisation of the assets and distribution of the proceeds
Article 49 - Decision on the procedure to be used
(a)proceeds with the realisation of the assets and the distribution of the proceeds; or
(b)takes a decision on the closure of the simplified winding-up proceedings without any realisation of the assets, in accordance with paragraph 2.
2. Member States shall ensure that the competent authority can take a decision on the immediate closure of the simplified winding-up proceedings without any realisation of the assets, only if any of the following conditions is fulfilled:
(a)there are no assets in the insolvency estate;
(b)the assets of the insolvency estate are of such a low value that it would not justify the costs or time of their sale and of the distribution of proceeds;
(c)the apparent value of encumbered assets is lower than the amount owed to the secured creditor(s) and the competent authority considers it justified to allow those secured creditor(s) to take over the asset(s).
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.
Article 50 - Electronic auction systems for the sale of the assets of the debtor
Member States may set out that for the purpose of the sale of the debtor’s assets users may also place bids for the purchase of the debtor’s business as a going concern.
2. Member States shall ensure that the electronic auction platforms, as referred to in paragraph 1, are used whenever the debtor’s business or assets subject to simplified winding-up proceedings are realised through auction.
3. Member States may extend the use of the electronic auction systems, as referred to in paragraph 1, to the sale of the debtor’s business or assets that are subject to other types of insolvency proceedings opened in their territory.
4. Member States shall ensure that the electronic auction platforms, as referred to in paragraph 1, are accessible by all natural and legal persons with domicile or place of registration in their territory or in the territory of another Member State. Access to the auction system may be subject to electronic identification of the user, in which case persons with domicile or place of registration in another Member State shall be able to use their national electronic identification schemes, in accordance with Regulation (EU) No 910/2014 41
Article 51 - Interconnection of the electronic auction systems
2. The Commission shall lay down by means of implementing acts technical specifications and procedures necessary to provide for the interconnection of Member States’ national electronic auction systems, setting out:
(a)the technical specification or specifications defining the methods of communication and information exchange by electronic means on the basis of the established interface specification for the system of interconnection of the electronic auction systems;
(b)the technical measures ensuring the minimum information technology security standards for communication and distribution of information within the system of interconnection of electronic auction systems;
(c)the minimum set of information that shall be made accessible through the central platform;
(d)the minimum criteria for the presentation of announced auction processes via the European e-Justice Portal;
(e)the minimum criteria for the search of announced auction processes via the European e-Justice Portal;
(f)minimum criteria for guiding the users to the platform of the national auction system of the Member State where they may submit their offers directly in the announced auction processes;
(g)the means and the technical conditions of availability of services provided by the system of interconnection;
(h)the use of the European unique identifier referred to in Article 16(1) of Directive (EU) 2017/1132 42 ,
(i)specification of which personal data can be accessed;
(j)data protection safeguards.
Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 69( 2 ), by [one year after the transposition deadline].
Article 52 - Costs of establishing and interconnecting electronic auction systems
2. Each Member State shall bear the costs of establishing and adjusting its national electronic auction systems to make them interoperable with the European e-Justice Portal, as well as the costs of administering, operating and maintaining those systems. This shall be without prejudice to the possibility to apply for grants to support such activities under the Union’s financial programmes.
Article 53 - Responsibilities of the Commission in connection with the processing of personal data in the system of interconnection of electronic auction platforms
2. The Commission shall define the necessary policies and apply the necessary technical solutions to fulfil its responsibilities within the scope of the function of controller.
3. The Commission shall implement the technical measures required to ensure the security of personal data while in transit, in particular the confidentiality and integrity of any transmission to and from the European e-Justice Portal.
4. With regard to the information from the interconnected national auction systems, no personal data relating to data subjects shall be stored in the European e-Justice Portal. All such data shall be stored in the national auction systems operated by the Member States or other bodies.
Article 54 - Sale of the assets by electronic auction
2. Member States shall ensure that the competent authority or, where relevant, the insolvency practitioner, informs through individual notices all known creditors on the object, time and date of the electronic auction, as well as on the requirements to participate therein.
3. Member States shall ensure that any interested person, including the existing shareholders or directors of the debtor, are allowed to participate in the electronic auction and bid.
4. If there are bids both on the acquisition of the debtor’s business as a going concern and on the individual assets of the insolvency estate, creditors shall decide which of the alternatives they prefer.
Article 55 - Decision on the closure of the simplified winding-up proceedings
2. Member States shall ensure that the decision on the closure of the simplified winding-up proceedings includes a specification of the time period leading to the discharge of the entrepreneur debtor or of those founders, owners or members of an unlimited liability microenterprise debtor who are personally liable for the debts of the debtor.
Chapter 5
Discharge of entrepreneurs in simplified winding-up proceedings
Article 56 - Access to discharge
Article 57 - Treatment of personal guarantees provided for business-related debts
Title VII
CREDITORS' COMMITTEE
Chapter 1
Establishment and members of the creditors’ committee
Article 58 - Establishment of the creditors' committee
2. By way of derogation from paragraph (1) Member States may provide that, before the opening of insolvency proceedings, the creditors’ committee can be established as of the submission of a request for the opening of insolvency proceedings where one or more creditors submit a request to the court for the establishment of such committee.
Member States shall ensure that the first general meeting of creditors decides on the continuation and the composition of the creditors’ committee established in accordance with subparagraph 1.
3. Member States may exclude in national law the possibility to establish a creditors’ committee in insolvency proceedings, when the overall costs of the involvement of such a committee are not justified in view of the low economic relevance of the insolvency estate, of the low number of creditors or the circumstance that the debtor is a microenterprise.
Article 59 - Appointment of the members of the creditors’ committee
2. Where the members of the creditors’ committee are appointed at the general meeting of creditors, Member States shall ensure that the court certifies the appointment within 5 days from the date of the communication of the appointment to the court.
3. Member States shall ensure that the appointed members of the creditors’ committee fairly reflect the different interests of creditors or groups thereof.
4. Member States shall ensure that creditors whose claims have only been provisionally admitted and cross-border creditors are also eligible for the appointment to the creditors’ committee.
5. Member States shall ensure that any interested party may challenge before the court the appointment of one or more members of the creditors’ committee on the ground that the appointment was not done in accordance with applicable law.
Article 60 - Duty of creditors as members of the creditors' committee
By way of derogation from the previous subparagraph, Member States may maintain national provisions that allow to set up more than one creditors’ committee representing different groups of creditors in the same insolvency proceedings. In this case, the members of the creditors’ committee represent solely the interests of the creditors who appointed them.
2. The creditors’ committee owes the duties to all creditors it represents.
Article 61 - Number of members
Article 62 - Removal of a member and replacement
2. Grounds for removal shall at least include fraudulent or grossly negligent conduct, wilful misconduct, or breach of fiduciary duties with respect to the creditors’ interests.
Chapter 2
Working methods and function of the creditors’ committee
Article 63 - Working method of the creditors' committee
2. That protocol referred to in paragraph (1) shall at least address the following matters:
(a)eligibility to attend and participate in the creditors’ committee’s meetings;;
(b)eligibility to vote and the necessary quorum;
(c)conflict of interests;
(d)confidentiality of information.
3. Member States shall ensure that the protocol referred to in paragraph (1) is available to all creditors, the court and the insolvency practitioner.
4. Member States shall ensure that the members of the creditors’ committee are given the possibility to participate and vote either in person or via electronic means.
5. Member States shall ensure that members of the creditors’ committee may be represented by a party supplied with a power of attorney.
6. The Commission shall establish a standard protocol by way of implementing acts. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 69(2).
Article 64 - Function, rights, duties and powers of the creditors' committee
To that end, Member States shall ensure that the creditors’ committee has at least the following rights, duties and powers:
(a)the right to hear the insolvency practitioner at any time;
(b)the right to appear and to be heard in insolvency proceedings;
(c)the duty to supervise the insolvency practitioner, including by consulting with the insolvency practitioner and informing the insolvency practitioner of the wishes of creditors;
(d)the power to request relevant and necessary information from the debtor, the court or the insolvency practitioner at any time during insolvency proceedings;
(e)the duty to provide information to the creditors represented by the creditors’ committee and the right to receive information from those creditors;
(f)the right to receive notice of and be consulted on matters in which the creditors represented by the creditors’ committee have an interest, including the sale of assets outside the ordinary course of business;
(g)the power to request external advice on matters in which the creditors represented by the creditors’ committee have an interest.
2. Where Member States entrust the creditors’ committee with the power to approve certain decisions or legal acts, they shall clearly specify the matters on which such approval is required.
Article 65 - Expenses and remuneration
2. Where the expenses referred to in paragraph 1 are borne by the insolvency estate, Member States shall ensure that the creditors’ committee keeps record of such expenses and the court has the authority to limit unjustified and disproportionate expenses.
3. Where Member States allow members of the creditors’ committee to be remunerated and such remuneration is borne by the insolvency estate, they shall ensure that the remuneration is proportionate to the function performed by the members and that the creditors’ committee keeps record of it.
Article 66 - Liability
Article 67 - Appeal
2. Member States shall ensure that the appeal procedure is efficient and expeditious.
Title VIII
MEASURES ENHANCING TRANSPARENCY OF NATIONAL INSOLVENCY LAWS
Article 68 - Key information factsheet
2. The content of the key information factsheet referred to in paragraph (1) shall be accurate, clear and not misleading and set out the facts in a balanced and fair manner. It shall be consistent with other information on insolvency or bankruptcy law provided within the framework of the European e-Justice Portal in accordance with Article 86 of Regulation (EU) 2015/848.
3. The key information factsheet shall:
(a)be drawn up and submitted to the Commission in an official language of the Union by [6 months after the deadline for transposition of this Directive];
(b)have a maximum length of five sides of A4-sized paper when printed, using characters of readable size;
(c)be written in a clear, non-technical and comprehensible language.
4. The key information factsheet shall contain the following sections in the following order:
(a)the conditions for the opening of insolvency proceedings;
(b)the rules governing the lodging, verification and admission of claims;
(c)the rules governing the ranking of creditors’ claims and the distribution of proceeds from the realisation of assets ensuing from the insolvency proceedings;
(d)the average reported length of insolvency proceedings, as referred to in Article 29(1), point (b) of Directive (EU) 2019/1023 43 .
5. The section referred to in paragraph (4), point (a)shall contain:
(a)the list of persons that can request the opening of insolvency proceedings;
(b)the list of conditions that trigger the opening of insolvency proceedings;
(c)where and how the request for the opening of insolvency proceedings can be submitted;
(d)how and when the debtor is notified of the opening of insolvency proceedings.
6. The section referred to in paragraph (4), point (b) shall contain:
(a)the list of persons that can lodge a claim;
(b)the list of conditions to lodge a claim;
(c)the time limit to lodge a claim;
(d)where to find the form to lodge a claim, when applicable;
(e)how and where to lodge a claim;
(f)how the claim is verified and validated.
7. The section referred to in paragraph (4), point (c) shall contain:
(a)a brief description of how rights and claims of creditors are ranked;
(b)a brief description of how proceeds are distributed.
8. Member States shall update the information referred to in paragraph 4 within a month after the entry into force of the relevant amendments to national law. The key information factsheet shall contain the following statement: ‘This key information factsheet is accurate as at [the date of submission of the information to the Commission or the date of the update]’.
The Commission shall arrange for that key information factsheet to be translated into English, French and German or, if the key information factsheet is drawn up in one of those languages, into the other two of them, and make it accessible to the public on the European e-Justice Portal under the insolvency/bankruptcy section for each Member State.
9. The Commission shall be empowered to modify the format of the key information factsheet or to extend or reduce the scope of the technical information provided therein by way of implementing acts. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 69(2)
Title IX
FINAL PROVISIONS
Article 69 - Committee
2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply
Article 70 - Review
Article 71 - Transposition
When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.
2. Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.