In a case that soon will be deliberated by the Court of Appeal of Liège (Belgium), the Director of Public Prosecutions has appealed a Commercial Court’s decision which established the opening of a réorganisation judiciaire par accord collectif procedure for a French company. This Court decided its competence because he considered that the COMI was in Belgium, thus the same country where its parent was located. In this ruling we can say that the Court applied well the principles of the Parmalat[4] decision.
The public prosecutor’s office posed in its appeal, as he will expose to the Court through its conclusions, several important issues that are essential to evaluate properly the law on réorganisation judiciaire procedure[5].
The first argument is that although Belgium (note that the public prosecutor’s office will never be seen by the European law as a dismembered institution of Belgium) has included the réorganisation judiciaire par accord collectif procedure in the Annexes to the Regulation, it is not possible that a Court may consider that this procedure is covered by the Regulation. Thus, according to the prosecutor’s office, this is not an "insolvency" procedure which entail a "divestment." Note also that the public prosecutor’s office has not used as an argument that this procedure will not lead to the appointment of a “liquidator".
Certainly, regarding to the text of the law on réorganisation judiciaire procedure, the opening decision of the réorganisation judiciaire par accord collectif procedure is not necessary and mandatory entailing a divestment. Neither entails an insolvency procedure (or another similar procedure as said by the ECJ in the case Gourdain[6]) nor necessarily appoints a liquidator within the meaning of a trustee in bankruptcy.
That company has placed its conclusions, as soon there will be the Court’s hearing, arguing that the terms "insolvency", "divestment" and “liquidator” from article 1 of the Regulation should not be interpreted under national law. Instead, as said in the ruling of case Parmalat, these are autonomous notions and must be interpreted independently and in relation to the objective pursued by the Regulation. They have also argued that when Mr. Virgos prepared his report[7], it was already known that it was impossible to establish a single definition of insolvency proceedings and of the concepts divestment or liquidator that could cover all the European Union’s countries. In some countries, insolvency proceedings begin with rather simple problems that do not lead by nature to a real insolvency situation, while in others, it’s required to be a real insolvency were assets are insufficient to meet current liabilities. In the same way, in other countries insolvency procedures can be conducted, particularly in cases of moderate difficulty, without the need for a real divestment and in others they just use partial divestments. Finally, in other countries the liquidator (appointed by the Court) may have a limited role.
Thus, there are three fundamental theories that will have to be dealt in the coming ruling: one based only on the Annexes, another focused on the nature of the proceeding and a last one combining both.
The first one maintains that, in order to consider that a proceeding falls within the scope of the Regulation, it needs to be listed in the Annexes and the judge will have to consider case by case that it fulfils the Regulation’s requirements. These requirements are that it has to be an insolvency procedure entailing a divestment and the appointment a provisional liquidator. It is also necessary that the judge could know the exact meaning of "insolvency", "divestment" and "provisional liquidator" within the sense of the Regulation, as it’s meant to be interpreted independently.
If the Court which has jurisdiction to address that matter does not request a preliminary ruling and gives judgement in favour of the public prosecution's office position, you might fear that from now on most of the Belgian réorganisation judiciaire par accord collectif procedures could not benefit from the Regulation.
The intervention of the Court of Appeal is expected and there is even the possibility of the intervention of the ECJ, whether at the Court of Appeal’s resort whether at the Court of Cassation’s. This case is not only vital to the concerned company but also for all those involved on the market.
The 4th Joint Fraud Conference triumphs again in London
The fourth annual Fraud Conference took place on 29 February, welcoming 160 delegates to the Royal College of Physicians in London. A collaboration between INSOL Europe’s Anti-Fraud Forum, the Fraud…
Update from the 63rd Session of UNCITRAL Working Group V, Vienna, December 2023
The 63rd session of the Working Group was held from 11–15 December 2023 in Vienna. INSOL Europe was represented by Past President Frank Tschentscher and Florian Bruder (Council Member, Germany). Members…
New EU Proposal for a Directive Harmonising Certain Aspects of Insolvency Law (COM(2022) 702 Final))
On 7 December 2022, the European Commission proposed new measures to further develop the EU’s Capital Markets Union (CMU), including a proposal for a Directive harmonising certain aspects of Insolvency…
Resilience in the face of Adversity – Dubrovnik Congress Report
INSOL Europe's second 'Annual Congress' of the year took place in its usual Autumn slot at the Rixos Hotel in Dubrovnik from 6-9 October with over 360 delegates in attendance, report Myriam Mailly and Paul…
INSOL Europe
Quick Links
Site Links
© 2024 - INSOL Europe All Rights Reserved