On 22 March 2019 I wrote a reply to professor De Weijs and two colleagues, to their letter, dated 20 March 2019, to the European Parliament (EP). The letter is available at https://drive.google.com/open?id=1l4Xeljvi2LjarI5aR6c7DBUv3YX2OlNa. In the letter these scholars heavily criticize the introduction of a Relative Priority Rule (RPR) as currently proposed in the draft Directive on preventive restructuring frameworks. Professor De Weijs et al argue that the introduction of an RPR in the EU, as an alternative to the Absolute Priority Rule (APR), would amount to a 'Teutonic shift within private law, company law and insolvency law’. The EP is advised against the to include such an RPR in the Directive.
In my reply, I explain that these scholars’ call should be set aside by the EP for at least five reasons: (i) there is quite some support for including an RPR in the Directive, (ii) they overestimate secured classes of creditors and underestimate European business realities, (iii) they fail to appreciate that a debtor (a business) under the proposed Directive is not insolvent, (iv) they engage in a combat on one isolated aspect, missing the broader gamut of proposed rules and tools in the Directive, and (v) professor De Weijs et al misunderstand the economic heart of the Directive, which is not about insolvency law as we know it. I leave aside that I think it is rather naive to think, let alone just a few days before the EP's vote, that a message of a caste of academics, from one University only, will carry any weight. As the scholars acknowledge the academic debate on APR and RPR is still in its infancy shoes. It is not ripe to bother European politicians with it. RPR is an option in the Directive, and Member States can embrace it or just put in aside.