The European Law Institute (ELI), established in 2011 [www.europeanlawinstitute.eu], is an independent non-profit organisation established to initiate, conduct and facilitate research, make recommendations and provide practical guidance in the field of European legal development. Building on the wealth of diverse legal traditions, its mission is the quest for better law-making in Europe and the enhancement of European legal integration.
By its endeavours, ELI seeks to contribute to the formation of a more vigorous European legal community, integrating the achievements of the various legal cultures, endorsing the value of comparative knowledge, and taking a genuinely pan-European perspective. As such, its work covers all branches of the law: substantive and procedural; private and public. The Rescue of Business in Insolvency Law Project team began their work late 2013 with the challenging aim of designing elements of an appropriate legal enabling framework for business rescue in Europe. This includes certain statutory procedures that could better enable parties to negotiate solutions when businesses become financially distressed.
ELI is pleased to announce that the final Report of this flagship project is ripe for presentation at the Annual Conference in Vienna, September 6, 2017. Panel members include Prof. Stephan Madaus (Halle-Wittenberg, Germany) and myself, both of whom are the Project Reporters, and Jenny Clift (UNCITRAL), Tuula Linna (University of Helsinki) and Elsbeth de Vos, Senior Judge District Court Amsterdam.
The Rescue of Business in Insolvency Law project is timely and may have a significant and positive impact on the harmonisation efforts of the European Commission as laid down in the November 2016 Proposal for a Directive on preventive restructuring frameworks. The Report of over 375 pages contains 115 recommendations on a variety of themes affected by the rescue of financially distressed businesses: legal rules for practitioners and courts, contract law, treatment and ranking of creditors’ claims, labour law, laws relating to transaction avoidance and corporate law.
The Report’s ten chapters cover: (1) Actors and procedural design, (2) Financing a rescue, (3) Executory contracts, (4) Ranking of creditor claims; governance role of creditors, (5) Labour, benefit and pension issues, (6) Avoidance transactions in out-of-court workouts and pre-insolvency procedures and possible safe harbours, (7) Sales on a going-concern basis, (8) Rescue plan issues: procedure and structure; distributional issues, (9) Corporate group issues, and (10) Special arrangements for small and medium-sized enterprises (SMEs) including natural persons (but not consumers.
Following the presentation and discussions, the ELI General Assembly will be given the opportunity to vote on this ELI Instrument. ELI Members, not present, may cast their vote as of 28 August 2017 electronically. Once approved, the Report will be published on ELI’s website.
For a special report, see 2017-08-25-business-rescue-special-report.pdf