Background
Under German law, when a company becomes insolvent or over-indebted, its directors are obliged to file for insolvency. If they fail to fulfil this duty, according to s 64 German limited liability company Act (GmbHG) from this point in time onwards, they have to compensate the company for those payments which (objectively) would not have been made by a prudent businessman. Such imprudence is presumed.
In practice, s 64 is one of the most powerful tools available to insolvency administrators claiming against directors.
On June 26, 2017, the recast EU regulation on insolvency proceedings1 (the Recast Insolvency Regulation) came into force.
Existing Legislation
Op 22 juni 2017 heeft het Hof van Justitie van de Europese Unie antwoord gegeven op een vraag die de gemoederen lang bezig heeft gehouden, namelijk: gelden de regels van overgang van onderneming ook in geval van een doorstart na een pre-pack faillissement?
The EU Regulation on Insolvency Law 1346/2000 (EIR) was considered a milestone in the cross-border coordination of national insolvency proceedings. The recast of the EU Regulation on Insolvency Law 2015/848, applicable to insolvency proceedings opened after 26 June 2017, considers substantial developments in national insolvency laws.
Background
From 26 June 2017 an enhanced EU regime governing the commencement, recognition and enforcement of insolvency and restructuring proceedings throughout the EU will come into effect. The principal aim of the new regime is to encourage a corporate rescue culture within the EU.
European Union
The recast Insolvency Regulation of 20 May 2015 embodies a further step towards the harmonisation of European Union insolvency law. The main provisions are set to apply to insolvency proceedings as of 26 June 2017.
The key changes relate to a broader scope, the “centre of main interests” (COMI) concept, secondary proceedings, group insolvencies and the introduction of insolvency registers. Overall, the new elements will increase the chance of a positive outcome in complex cross-border insolvencies and offer better cooperation and transparency.
European Leveraged Finance Alert Series: Issue 6
Legislative changes in Italy (starting from 2012) facilitated leveraged transactions facilitating security in both bank and bond financings and aligning bond and bank finance options. These changes have catalyzed creditors’ appetite for Italian leveraged finance transactions and helped fuel a resurgence in M&A activity in Italy. Here are ten (plus one) things to consider when doing a leveraged finance deal in Italy:
A revised EU regulation applies to new insolvencies from 26 June 2017. Widely referred to as EIR Recast (EIR means European Insolvency Regulation), it replaces the regime that has been in place for over 15 years.
The official title of EIR Recast is Regulation 2015/848 of the European Parliament and of the Council of 20 May 2015. The commencement of EIR Recast is newsworthy for many reasons, not least because the United Kingdom (when it leaves the EU) will not have the benefit or the burden of the new regime.