Suppose you were a German bank lending to a Spanish debtor under a loan agreement governed by German law. Once your Spanish debtor stops paying, the bank would have to obtain a German legal judgment and would then have to enforce it in Spain. Any measure to secure the debtor's assets in the meantime, is typically subject to the jurisdiction where the asset is located, or subject to lengthy recognition proceedings. Having to resort to local law measures usually puts foreign creditors in a worse-off position than local ones.
The EU Regulation No 655/2014 of 15 May 2014 established a European Account Preservation Order (“EAPO”). The Regulation became applicable as of 18 January 2017 within the EU except for the United Kingdom and Denmark .
Who should be interested in this Regulation?
Subject to the reservation in 2 below, anybody who holds money claims against a debtor domiciled in another EU Member State, whether a company or a consumer, provided that no insolvency proceedings are pending with regard to the debtor.
While the number of corporate insolvencies in Germany has declined over the last couple of years, the general market perception is that the number of insolvencies may increase again in 2017. Also, as more larger companies are facing distressed situations, the overall value of distressed debt is therefore expected to rise as well.
The legal framework for restructuring & insolvency in Germany will also change in 2017, not only based on domestic legislation, but also because of developments on the EU level.
2017 will see major changes to the UK legal landscape, with Article 50 of the Treaty on European Union expected to be triggered by the end of March 2017 to begin the Brexit process. The legal implications of Brexit will be hugely significant; preparing for their impact will be a substantial challenge across every industry sector. Our Preview of 2017 outlines these implications, as well as identifying other trends and issues we expect to be on the legal agenda this year.
Introduction
After months of drama prompted by the intertwined destinies of a constitutional referendum and the recapitalization of Monte dei Paschi di Siena (“MPS”), Italy’s third largest bank, and following the resignation of the Renzi government, the first important measure approved by the new Italian cabinet was an emergency decree aimed at safeguarding the Italian banking sector.
The uncertainties of the UK’s Brexit negotiations with the remaining 27 EU member states are weighing heavily on the UK economy. The 2 years of negotiations will not even begin until notice is served under Article 50 and the procedure as to how Article 50 can be triggered will be the subject of a Supreme Court decision expected later this month.
Expect the unexpected: The year ahead for the Financial Institutions Sector 1 Expect the unexpected: The year ahead for the Financial Institutions Sector 1 2 Hogan Lovells Expect the unexpected: The year ahead for the Financial Institutions Sector January 2017 3 Introduction 4 Rachel Kent and Emily Reid At a glance: Calendar of key events 6 Year ahead: Key features 8 FinTech: The future is now 10 PSD2: Getting ahead of the competition?
On 18 January 2017, Regulation (EU) No 655/2014 (the "Regulation") will become fully applicable. It will henceforth be possible to obtain in any EU Member State, with the exception of Denmark and the United Kingdom, a preservation order for bank accounts of a debtor situated in another Member State.
The Regulation introduces at the European level a certain degree of transparency in terms of the debtor's assets.
In December 2013, the Bank of Slovenia adopted exceptional measures resulting in the annulment of financial instruments held by shareholders and subordinated bondholders for the purpose of burden-sharing in rescuing five Slovenian banks.1 In its decision of 19 July 2016, the European Court of Justice confirmed that such burden-sharing is not contrary to EU law; however, the Slovenian public remains divided.