Oxford University Press has published the edited volume based on the European Law Institute’s (ELI) project ‘Rescue of Business in Insolvency Law’. The project ran from 2013 to 2017 under the auspices of the ELI. It was conducted by professor Bob Wessels (emeritus University of Leiden) and professor Stephan Madaus (Martin Luther University of Halle-Wittenberg). They were assisted by Gert-Jan Boon (University of Leiden) and around forty European advisors and correspondents. Results of the project have been an inspiration for both EU and national legislators.
Furthering European Business Rescue Laws
The ELI study sought to design (elements of) a legal framework that will enable the further development of coherent and functional rules for business rescue in Europe. This includes certain statutory procedures that could better enable parties to negotiate solutions where a business becomes financially distressed. Such a framework also includes rules to determine in which procedures and under which conditions an enforceable solution can be imposed upon creditors and other stakeholders, despite their lack of consent. The project had a broad scope and extended to consider frameworks that can be used by (non-financial) businesses out of court and in a pre-insolvency context.
The results of the project include an instrument and national inventory and normative reports, as well as an international inventory report on recommendations from standard-setting organisations. This is presented in this OUP Publication ‘Rescue of Business in Europe’, which provides a full overview of the work prepared in the course of the project in LXIV + 1434 pages.
Part I: Instrument on Rescue of Business in Insolvency Law
The result of the project is an Instrument on Rescue of Business in Insolvency Law (Instrument) as unanimously approved by the ELI Council and ELI General Assembly in 2017. The Instrument has ten Chapters that contain recommendations on a variety of themes affected by the rescue of financially distressed businesses. The Report contains recommendations on a variety of themes affected by the rescue of financially distressed businesses. 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 of 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). In total, the Instrument consists of some 115 recommendations.
The topics addressed in the Instrument are intended to present a tool for better regulation in the EU, developed in the spirit of providing a coherent, dynamic, flexible and responsive European legislative framework for business rescue. Mindful of the European Commission’s commitment to better legal drafting, the Instrument’s proposals are formulated as comprehensibly, clearly, and as consistently as possible. Still, the recommendations are not designed to be overly prescriptive of specific outcomes, given the need for commercial flexibility and in recognition of the fact that parties will bargain in the ‘shadow of insolvency law’.
Part II: National/international reports
In addition to the Instrument, the book also includes national/international inventory reports and normative reports. The national reports sketch the legal landscape in 13 EU Member States, being Austria, Belgium, England and Wales, France, Germany, Greece, Hungary, Italy, Latvia, The Netherlands, Poland, Spain and Sweden. In addition, this part comprises an inventory report on international recommendations from standard-setting organisations for business rescue.
For further information, see here.