European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Like Regulation No 1215/2012, which repeals and replaces Regulation No 44/2001 of 22 December 2001, Regulation No 2015/848 of 20 May 2015 , which replaces Regulation No 1346/2000 of 29 May 2000 , belongs to a movement to integrate international conventions into EU law - except that the latter regulation replaced a convention signed in Brussels on 23 November 1995, which never came into force. Regu …

Context

Like Regulation No 1215/2012, which repeals and replaces Regulation No 44/2001 of 22 December 2001, Regulation No 2015/848 of 20 May 2015 , which replaces Regulation No 1346/2000 of 29 May 2000 , belongs to a movement to integrate international conventions into EU law - except that the latter regulation replaced a convention signed in Brussels on 23 November 1995, which never came into force. Regulation No 2015/848 on insolvency proceedings is perfectly in line with the provisions of Regulation No 1215/2012 the scope of application of which does not extend to covering “bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings”. Regulation No 2015/848 pursues the same objective of settlement of conflicts of jurisdiction: it sets jurisdiction for the opening of insolvency proceedings and resulting judgments and organizes the recognition of those judgments. However, unlike Regulation No 1215/2012, it also governs conflicts of laws in international bankruptcy matters. Regulation No 2015/848 is accompanied by an implementing regulation, Regulation No 2017/1105 , which provides that four standard notice forms must be used - in force as of 27 June 2017 - i) to inform creditors, ii) for the lodgement of claims, iii) for the lodgement of objections in group coordination proceedings and, iv) for access to information via the European e-Justice Portal.

Regulation No 2015/848 is the result of the proposals for modernization put forward by the Commission on 12 December 2012  and in the Commission Recommendation of 12 March 2014 on a new approach to business failure and insolvency . The proposals for the 2012 revision of the insolvency regulation aimed to extend the scope of application of the regulation by amending the current definition of the term “insolvency proceedings” and by including “pre-insolvency proceedings” - procedures which provide for the restructuring of a company at a pre-insolvency stage - and “hybrid proceedings” which leave the existing management in place. The Commission also proposed that certain minimum information relating to the insolvency proceedings should be published in an electronic register available to the public free of charge via the internet and that the standard form and the lodging of claims for foreign creditors should be facilitated, particularly small creditors and SMEs. The proposal created a specific legal framework to deal with the insolvency of members of a group of companies while maintaining the “entity-by-entity” approach. The 2014 recommendation essentially encouraged the development of preventive rescue procedures and the setting up of an effective framework for the restructuring of companies within the EU.

Ultimately, the scope of the new regulation was considerably extended. Applicable not only to relations between Member States but also to any cross-border situation , the regulation, which attributes jurisdiction for the opening of insolvency proceedings to the courts of the Member State within the territory of which “the centre of the debtor's (natural person, legal person, trader or individual) main interests” is situated, now defines that concept as “the place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties” (Art. 3(1) paragraph 1). Although the regulation maintains the rebuttable presumption for companies and legal persons that the center of their main interests is their registered office, it also lays down a presumption in respect of natural persons in favor of their principal place of business or place of habitual residence. In order to prevent abusive forum shopping allowing parties to transfer assets or judicial proceedings from one Member State to another with a view to obtaining a more favorable legal position, those presumptions do not apply under the new regulation where the registered office or the principal place of business has been moved to another Member State within the 3-month period or, with regard to the place of habitual residence, within the 6-month period, prior to the request for the opening of insolvency proceedings (Art. 3(1), paragraphs 2, 3 and 4). 

The law applicable to insolvency proceedings, whether main proceedings (in the Member State where the debtor has the center of its main interests - Art. 3(1)) or secondary (where the proceedings are opened in the Member State where the debtor has an establishment - Art. 34 and 3(2)), remains that of the State of the opening of proceedings or “lex fori concursus” (Art. 7 or Art. 35). However, secondary insolvency proceedings now no longer necessarily lead to liquidation of assets: by virtue of Article 38 (4), the court seized of a request to open secondary proceedings may open any type of insolvency proceedings as listed in Annex A (including preventive). The new text establishes the autonomy of secondary proceedings with respect to the main proceedings  and aims to more effectively articulate these parallel proceedings . 

To ensure a better treatment of the insolvent members of groups of companies, the regulation has introduced group coordination proceedings which may be requested by any insolvency practitioner appointed in insolvency proceedings opened in relation to a member of the group (Art. 61). A coordinator is appointed to identify and outline recommendations appropriate to an integrated approach to the resolution of the group members' insolvencies (Art. 72). It also provides for a standard form for the lodging of claims (Art. 54) and creates insolvency registers in order to reinforce the rights of creditors (Art. 24). 

Implementing Regulation No 2017/1105 of 12 June 2017, OJEU 22 June 2017.

Case C-328/12 Ralph Schmid, Judgment of 16 January 2014, LawLex201400000035JBJ.

See Article 50, which provides that where main insolvency proceedings are opened following the opening of secondary proceedings, Articles 41 (Cooperation and communication between insolvency practitioners), 45 (Exercise of creditors' rights), 46 (Stay of the process of realization of assets), 47 (Power of the insolvency practitioner to propose restructuring plans) and 49 (Assets remaining in the secondary insolvency proceedings) apply to the secondary proceedings opened first.

 See notably Article 41 on cooperation and communication between insolvency practitioners; Article 42 on cooperation and communication between courts; Article 43 on cooperation and communication between insolvency practitioners and courts; Article 46 on the stay of the process of realization of assets; Article 51 on the conversion of secondary insolvency proceedings.

European Business Law

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382. Context

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Les décisions de justice citées dans ce paragraphe :

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