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2017-03-doc4 Part II Memo04 - EIR 2015 and the Annexes

Further to my invitations, expressed on my blog, go to 2017-01-doc13, to participate in developing my book International Insolvency Law, Part II, please see attached the fourth memo, this time related to the definition of 'collective proceedings' in the meaning of Article 1(1) EIR 2015 in its relation to Annex A (and the proceedings listed in it) and the troublesome way of changing the Annexes A and B, with as a recent example Regulation (EU) 2017/353 of early March 2017. Responses please before 27 March to I thank those authors that reacted to earlier memos, by quality responses or by sending forthcoming articles. This all contributes to the quality of the publication!Memo04

2017-03-doc3 IBA Insolvency Section - Michael Prior Scholarship 2017

With the aim of providing interactive and educational opportunities to the growing international legal community, several committees within the International Bar Association (IBA) offer opportunities for young lawyers from around the world to apply for scholarships and to be nominated for awards that recognise outstanding individuals in the legal profession. The Insolvency Section of the IBA offers the Michael Prior Scholarship. Michael has been an insolvency veteran, closely connected to the IBA, who was first at what is now called Nabarro LLP and later at Moon Beever. He died in a car crash around 4 years ago. To honor him, the Insolvency Section looks for research and comments on laws from different parts of the world '... that could have the effect of discouraging company directors restructuring a distressed company in the "zone of insolvency," as well as recent proposed legislative responses to the often undesirable economic effects of these laws imposing on directors personal liability for "trading whilst insolvent". Awards include a trip to Sidney at the annual event in October 2017. For information go to

2017-03-doc2 CJEU 2 March 2017 (Eschenbrenner v Bundesagentur für Arbeit)

Alphonse Eschenbrenner, who is he? Mr Eschenbrenner is a French national and lives in Rahling (France), close to the German border. Since 1996 he had been employed as a driver with the undertaking of Reisen, located in Pirmasens (Germany). His German earnings are taxed in France. In 2012 insolvency proceedings are opened against his employer Reisen. While salaries and wages were paid in full by that undertaking up to March 2012, Eschenbrenner had, on the date of the opening of the insolvency proceedings, a claim against his employer of EUR 5500 in respect of his remuneration for the months of April, May and June 2012. By virtue of those outstanding salary claims, Eschenbrenner requested, on 13 July 2012, the payment of insolvency benefit. To calculate the amount of that benefit, the German Tax Agency deducted from his gross remuneration the sum of EUR 3550 awarded by the provisional liquidator by way of advance payment for the period 1 April to 28 June 2012, as well as an amount corresponding to social security contributions and an advance, in respect of expenses, he had obtained for the month of April. Moreover, the Agency, based on German law, deducted from that remuneration an amount corresponding to income tax, calculated in accordance with German law, amounting for the three months at issue, to EUR 185, EUR 175 and EUR 173 respectively. Consequently, by decision of 18 July 2012, Mr Eschenbrenner was awarded a total amount of EUR 356 in respect of that benefit. It's evident that he disagrees because he is not taxable in Germany. He proposes that German workers receive insolvency benefit equivalent to 100% of their previous net wage, while he is receiving an amount significantly lower than its previous net pay. The Court of Justice of the EU has a cold shower waiting for Eschenbrenner. See CJEU 2 March 2017, C-496/15, ECLI:EU:C:2017:152 (Alphonse Eschenbrenner v Bundesagentur für Arbeit). It decided that Article 45 TFUE and Article 7 of Regulation 492/2011 on freedom of movement for workers within the Union must be interpreted as not precluding, in circumstances such as those at issue in the main proceedings, the amount of the insolvency benefit awarded by a Member State to a frontier worker who is not subject to income tax in that State, and for whom that benefit, under the provisions applicable to him, is not taxable, from being determined by deducting income tax, as it applies in that State, from the remuneration used to calculate that benefit. The CJEU presents the conseuence of its argumentation: a frontier worker such as Eschenbrenner, unlike persons working and residing in that State, does not receive a benefit corresponding to his previous net remuneration. The fact that this worker does not have a claim against his employer corresponding to the part of his previous gross salary which he has not received because of that deduction has no effect in that regard.

2017-03-doc1 Business rescue conference 27-28 April in Vienna

On 27-28 April 2017, in Vienna, the European Law Institute (ELI) will host a Conference on the Project 'Business and Rescue in Insolvency Law’. It will be held in the Palais Trautson, which sound very fine. The conference most probably is the last as the Report is nearing its end. The first one was held also in Vienna early 2015 (see, the second one in autumn 2016 in Leiden, which included discussions and observations from some 15 judges respresenting 10 European countries ( The Project goes into quite some detail on the following subjects: governance and Supervision of a rescue in court and out-of-court; financing a rescue; a stay; executory contracts; ranking of creditors; labour contracts; avoidance powers, particularly safe harbour for failed rescue efforts in a later formal insolvency; sales of substantially all of the debtor’s assets on a going-concern basis; rescue plan issues: procedure and structure; distributional issues; corporate group issues and the question whether special arrangements for small and medium-sized enterprises (SMEs) including natural persons (but not consumers) are necessary on a European level. In ELI's newsletter January-February 2017 (just released, see the conference is announced as particularly attractive to those following the Project closely, since its Project Team (professor Stephan Madaus and myself) is completing their final report and will be presenting tangible results and suggestions. All National Correspondents (NCs) of the Project, the Advisory Committee and the Members Consultative Committee (MCC) are invited to attend, as well as those interested in Business Rescue. More information can be found via the newsletter. In the ELI newsletter of November-December 2016 Prof. Christiane Wendehort, vice-present of ELI, mentions our ‘first generation’ ELI project, that is entering its closing phase. The project is, she notes: ‘I … dare say, yielding stunning results: … the work of a network chaired by Bob Wessels and Stephan Madaus will greatly help in providing a better legal environment for the rescue of businesses in distress.’ Nice words, let's get some action.

2017-02-doc13 Territoriality of EU Insolvency Regulation?

One of the characteristics of the EU Insolvency Regulation is its territoriality. In the draft text of my forthcoming book, I made some remarks on the topic. This is the third memo inviting reactions. See the initial invitation to participate in developing the fourth edition of my book on EU insolvency Law on this blog, go to 2017-01-doc13. For the other memo's search for 'memo' on this blog, and you'll find them. Once again, I am looking forward to your reactions, please before 13 March, at Memo03