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Dear Members
Preparations are well underway for our Eastern European Countries’ Committee Conference in Vilnius next week. I am very much looking forward to it as I have not been to the conference, or to Vilnius, before. We are looking forward to a keynote speech by Prof. Salvija Muleviciene of Mykolas Romeris University (Lithuania) in the morning, and we have just confirmed that Iryna Zharonkina of Pravo-Justice (Ukraine) will be making the keynote speech in the afternoon.
The week after that, I will be in Wiesbaden for the NIVD Spring Dialogue on the Future of Judicial Reorganization and Liquidation… another first for me.
Regrettably I no longer qualify for the Young Members / AIJA joint conference in Seville (29 June – 1 July) but I will be at the joint R3 event in London on 15 June where I will be opening the day.
One thing that is becoming clear to me from the planning of these events, is that whilst people have had an opportunity to reflect on the Proposed Harmonisation Directive, it may be difficult to identify and promote a consensus on several aspects. Given INSOL Europe’s engagement with the EU Commission, we will channel the views of our members to those at the very heart of this project.
In the same vein, INSOL Europe’s recent participation at the UNCITRAL working Group V meeting in New York has been welcomed. We are very much ‘back at the table’ and making our presence felt in the places that matter.
Finally, for now, we are reviewing our social media activity and profile. If this is an area of interest to you, please do not hesitate to get in touch. I will be posting and promoting our upcoming events on LinkedIn and don’t forget to register early for Amsterdam!
See you somewhere soon,
Barry Cahir
President, INSOL Europe
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Barry Cahir
President of
INSOL Europe
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This issue is kindly
sponsored by:
DLA Piper is a global law
firm with lawyers located
in more than 40 countries
throughout the world.
www.dlapiper.com
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| 2023 Annual Congress - Amsterdam - Registration Now Open! |
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Registration is now open for our
Annual Congress in Amsterdam, 12-15 October
Download the Congress Brochure • Technical Programme
Early booking deadline 8 June 2023
With thanks to our Main Sponsor:
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| Academic Conference: Registration Now Open! |
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Registration is now open for our
Academic Conference, 11-12 October
Download the Conference Brochure • Technical Programme
Early booking deadline 8 June 2023
With thanks to our Academic Sponsor:
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| Bob Wessels honoured by the King of the Netherlands |
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On 20 April 2023, during the lustrum congress of the Conference on European Restructuring and Insolvency Law (CERIL), Professor Emeritus Bob Wessels was appointed Officer in the Order of Orange-Nassau of the Kingdom of the Netherlands.
On behalf of the King, Councillor Wouter Kolff, Mayor of Dordrecht, presented the decoration to Professor Wessels for his longstanding contribution to the advancement of private law and in particular insolvency law in the Netherlands, Europe and beyond.
The Order was bestowed on Professor Wessels in the presence of his family and numerous (former) colleagues from the Netherlands and abroad during the CERIL congress at Leiden University on the recent legislative proposal by the European Commission on harmonisation of insolvency law. The Mayor noted that Professor Wessels has played an important role in shaping the field now known as international restructuring and insolvency law.
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Photo by Monique Shaw
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Because of his many and distinguished contributions to the Dutch, European and international community, the King of the Netherlands was graciously pleased to appoint Professor Wessels Officer in the Order.
Bob Wessels will be making a keynote address at both the INSOL Europe Annual Congress and Academic Forum Annual Conference in Amsterdam in October this year.
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| Eurofenix Spring 2023 now published! |
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| Insolvency & Restructuring Statistics: Update from Latvia |
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2022 was the first year since 2014 that saw an increase in the number of corporate insolvencies, compared to the previous year, writes Edvīns Draba from Sorainen (Riga, Latvia); INSOL Europe Country Coordinator for Latvia.
In fact, 393 insolvency cases were initiated, out of which 302 proceeded to the commencement of insolvency proceedings in 2022, compared to 257 initiated cases and 242 commenced proceedings in 2021. It is also notable that the increase in the number of filings by creditors’ rose much sharper, up to 186 in 2022, making up for almost half of all cases initiated, compared to 47 in the year before.
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The explanation to the above change lies in the fact that the restrictions aimed at curbing the consequences of the COVID-19 pandemic were no longer in force in 2022 – the insolvency moratorium (i.e. prohibition for the creditor to file for insolvency against a debtor) expired on 2 September 2021, whereas the safe harbour principle (i.e. suspension of the management boards’ obligation to file) expired on 1 January 2022.
For comparison with the above figures of the last couple of years, as much as 986 corporate insolvencies were initiated back in 2014.
In the same vein, the number of initiated legal protection proceedings (restructuring proceedings) also increased last year (108 in 2020, 92 in 2021, 129 in 2022), which, too, is a natural consequence of the aforementioned removal of restrictions. However, the number of proceedings that have made it to the approval of the restructuring plan by the court and commencement of proceedings was down to 16 last year, compared with 26 a year earlier. Therefore, the proportion of approved plans has fallen from 28% in 2021 back to 12%, i.e. same percentage, as in 2020. In the majority of cases, the reason for the rejection to commence the proceedings was that the creditors refused to accept the restructuring plan. Thus, the proportion of commenced legal protection proceedings (5%) in the joint pool of corporate insolvencies and restructurings has returned to approximately the same figure, as in 2020 (4%), whereas the said indicator had briefly risen to 10% in 2021.
Contrary to the aforementioned statistics of corporate insolvency proceedings, individual insolvencies continued to follow the downward trend, with the number of commenced proceedings decreasing in 2022 – down to 816 from 901 in the previous year and 986 in 2020.
Further statistics from Latvia and from all jurisdictions can be found on our website here.
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| Pre-Packs, Employees and the Spirit of EU Law |
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The hot topic in European insolvency has migrated from the implementation of the Preventive Restructuring Directive to the Proposal for a Directive on the harmonisation of certain aspects of insolvency law. Among those provisions is the pre-pack.
You can read Jenny Gant’s article on ‘Pre-Packs and the Impact on Employees’ here, which focuses on the interaction of the proposal of harmonisation of pre-packs in the Member States and the Acquired Rights Directive in the light of the case law of the European Union Court of Justice.
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Jenny Gant is a Lecturer at University of Derby, UK and Secretary of the INSOL Europe Academic Forum.
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| EU Study Group Update: EESC opinion on Harmonisation Proposal |
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On 7 December 2022, the Commission published a proposal for a directive harmonising certain aspects of insolvency law in the EU.
In Parliament, the referral was announced in plenary on 26 January 2023 and the file was assigned to the Committee on Legal Affairs (JURI), with Pascal Arimont (EPP, Belgium) as rapporteur.
The Committees on Economic and Monetary Affairs (ECON) and on Internal Market and Consumer Protection (IMCO) have been asked to give opinions; IMCO has decided not to give an opinion. The Committee of the Regions was not asked to provide an opinion. The Council started discussions on the proposal on 12 December 2022.
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The European Economic and Social Committee (EESC) adopted its opinion on the Proposal for a directive harmonising certain aspects of insolvency law on 22 March 2023. The EESC:
- underlines that a properly designed insolvency regime should help viable businesses to remain operational, avoiding their premature liquidation. The aim should be to find a balance between premature insolvency and proceedings starting too late;
- doubts whether the proposal, which is presented as an important step in closing relevant gaps for the improvement of the EU's Capital Market Union, can actually fulfil this expectation. The proposal falls short of providing a harmonised definition of insolvency grounds and the ranking of claims, both of which are key to achieving greater efficiency and limiting the existing fragmentation in national insolvency rules;
- urges the Commission, the Parliament and the Council to revise the proposal in Article 27 to oblige counterparties, e.g. suppliers to a business that is entering insolvency proceeding, to sign executory contracts, which are then assigned to the acquirer of the business without the consent of the counterparty;
- welcomes the proposal to introduce a special procedure to facilitate and speed up the winding down of microenterprises, allowing for a more cost-efficient insolvency process for such enterprises;
- recommends resorting to other competent players, other than national courts, such as insolvency practitioners, to help reduce the burden on the judiciary;
- is of the view that efficient insolvency and creditor/debtor rights (ICR) regimes are one of the complementary tools in the policy maker's arsenal to contain the growth of NPLs (non-performing loans) by increasing loan repayment probability and by adjusting NPL levels more quickly.
The EESC opinion can be found here.
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| Richard Turton Award 2023: Deadline approaching |
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Deadline for applications: 23 June 2023
Richard Turton had a unique role in the formation and management of INSOL Europe,
INSOL International, the English Insolvency Practitioners Association and R3, the Association of Business Recovery Professionals in the UK. In recognition of his achievements, these four organisations jointly created an award in memory of Richard. The 2023 competition is now open for anyone who is a national of a developing or emerging nation; works in or studies insolvency & restructuring law and practice and is under 35 years of age.
The successful applicant will be asked to write a paper of 3,000 words on a subject of insolvency or turnaround agreed with the panel. This paper will be published in summary in one or more of the four Member Associations' journals and in full on their websites. The winner will be invited to attend the INSOL Europe Annual Congress in Amsterdam, 12-15 October 2023, expenses paid. Applications deadline: 23 June 2023.
For more information and to apply, visit the Richard Turton Award page here.
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| 2023 EECC Conference: Now only 1 week to go! |
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| More joint events coming soon! |
The Young Members Group of INSOL Europe and the Insolvency Commission of AIJA are to join forces again and hold a seminar in the beautiful city of Seville from 29 June until 1 July 2023. The format will be similar to the very successful seminar on Mallorca and the technical committee is working hard to put together an attractive and special technical programme, as well as some social highlights as a frame for a wonderful weekend.
Find out more or register your place here before 16 May to get the early-bird discount.
The 17th annual R3 and INSOL Europe Conference on Cross-border Restructuring and Insolvency returns to London on 15 June 2023, taking place at the sumptuous venue, No.11 Cavendish Square, a stone’s throw away from Oxford Circus. This in-person all-day conference is aimed at restructuring and insolvency professionals with an interest in cross-border matters and all professionals interested in cross-border restructuring and insolvency, including financial advisers, lenders, distressed asset investors, judges and academics.
Our President Barry Cahir will be opening the day, and there will be a panel session on Recognition of English and continental insolvency proceedings in the aftermath of Brexit led Chris Laughton (Mercer & Hole, UK). Full details can be found here.
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We welcome feedback, news and story ideas for future newsletters.
Please send your suggestions to Paul Newson, CEO & Communications Manager,
email: paulnewson@insol-europe.org.
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| Disclaimer: This newsletter is sent to members of INSOL Europe. No responsibility legal or otherwise is accepted by INSOL Europe for any errors, omissions or otherwise. The opinions expressed in the articles that appear are not necessarily shared by any representative of INSOL Europe. |
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