To date, the German Insolvency Code (Insolvenzordnung) does not contain provisions governing group insolvencies. If several entities within a group of companies become insolvent, individual insolvency proceedings are opened and sometimes even individual insolvency administrators are appointed for each entity.

German proposals

Under the "resolution measure," the healthy assets and businesses of BES will be spun off into a new bank ("Novo Banco," provisionally), while problem assets will remain with the vestigial entity, and losses will be borne by shareholders and subordinated creditors. Novo Banco will be recapitalized by Portugal's central bank and rebranded.

The European Commission recently published a recommendation addressed to Member States on a new approach to rescuing businesses and offering a second chance to honest entrepreneurs. It aims to ensure that viable businesses experiencing financial difficulti es have access to restructuring mechanisms at an early stage to prevent insolvency and maximise overall value for creditors, employees and owners. It also proposes a second chance for honest entrepreneurs involved in insolvency proceedings.

On 9 April 2014, the Commission published proposals to amend the existing Shareholder Rights Directive (2007/36/EC).

16 January 2014
Case C-328/12
Court of Justice of the European Union (Judges Tizzano, Lenaerts, Borg Barthet, Levits, Berger (Rapporteur))

The Court of Justice extended the reach of the EU Insolvency Regulation to allow proceedings to set aside transactions to be brought against defendants resident in non-member states, confirming that it has universal effect.

HR Consultancy

DURC: new system officially started

The new system of internal DURC (“Documento Unico di Regolarità Contributiva”), through which the INPS (“Istituto Nazionale della Previdenza Sociale”) ensures the regular payment of social security contributions by the employer, officially started. 

These days, in fact, the companies have started to receive by certified e-mail (PEC) an invitation to stabilize any irregularity within 15 days.

Fixed term employment contract: fines replace reinstatement

Het Hof van Justitie heeft geoordeeld dat onder de werkingssfeer van de Insolventieverordening niet alleen situaties vallen die verband houden met twee of meer lidstaten; een dergelijke algemene en absolute voorwaarde voor de toepassing van de Insolventieverordening zou de doelstelling hiervan immers voorbij schieten en een efficiënte en doeltreffende afwikkeling van insolventieprocedures in het gedrang brengen.

A lingering misperception among American businesspersons and some commercial lawyers is that it is a fool’s errand to commence an insolvency case seeking reorganization in a European nation because those national laws prescribe liquidation rather than rehabilitation. These business leaders often dismiss out-of-hand insolvency relief on the continent for a troubled European subsidiary and elect to wind up the company’s affairs outside the judicial system.

Key Point

The High Court decided how the expected surplus assets of Lehman Brothers International Europe (LBIE) should be distributed between a number of creditors whose claims include subordinated loans, statutory interest and foreign currency conversion losses.

The Facts

Financial Services Disputes and Investigations

ECHR finds double jeopardy: Crimes sanctioned by Consob and heard by the Court of Appeal cannot be tried again in court proceedings