Text proposed by the Commission

Amendment

(1) The objective of this Directive is to contribute to the proper functioning of the internal market and remove obstacles to the exercise of fundamental freedoms, such as the free movement of capital and freedom of establishment, which result from differences between national laws and procedures in the area of insolvency.

(1) The objective of this Directive is to contribute to the proper functioning of the internal market and the Capital Markets Union and remove obstacles to the exercise of fundamental freedoms, such as the free movement of capital and freedom of establishment, which result from differences between national laws and procedures in the area of insolvency.

Text proposed by the Commission

Amendment

(2) The wide differences in substantive insolvency laws acknowledged by Regulation (EU) 2015/848 of the European Parliament and of the Council32 create barriers to the internal market by reducing the attractiveness of cross-border investments, thus impacting the cross-border movement of capital within the Union and to and from third countries.

(2) The wide differences in substantive insolvency laws acknowledged by Regulation (EU) 2015/848 of the European Parliament and of the Council32 and the stark divergence in the quality of domestic insolvency procedures as measured by the World Bank in its Doing Business studies create barriers to the internal market by reducing the attractiveness of cross-border investments, thus impacting the cross-border movement of capital within the Union and to and from third countries. Those differences also mean that harmonising certain aspects of insolvency law could entail changes in some Member States.

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32 Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (OJ L 141 5.6.2015, p. 19).

32 Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (OJ L 141 5.6.2015, p. 19).

Text proposed by the Commission

Amendment

(3) Insolvency proceedings ensure the orderly winding down or restructuring of companies or entrepreneurs in financial and economic distress. These proceedings are key in financial investments, as they determine the final recovery value of such investments. Diverging rules among Member States have contributed to increasing legal uncertainty and unpredictability about insolvency proceedings’ outcome, so raising barriers especially for cross-border investments in the internal market. Large divergences in recovery value and time required to complete insolvency proceedings across the Union have negative repercussions on cost predictability for creditors and investors in cross-border situations in the internal market.

(3) Insolvency proceedings ensure the orderly winding up or restructuring of companies or entrepreneurs in financial and economic distress. These proceedings are key in financial investments, as they determine the final recovery value of such investments. Diverging rules among Member States have contributed to increasing legal uncertainty and unpredictability about the value of companies and the outcome of insolvency proceedings, so raising barriers especially for cross-border investments in the internal market. Large divergences in recovery value and time required to complete insolvency proceedings across the Union have negative repercussions on cost predictability for creditors and investors in cross-border situations in the internal market

Text proposed by the Commission

Amendment

(4) The integration of the internal market in the area of insolvency laws pursued by this Directive is a key tool for a more efficient functioning of the capital markets in the European Union, including greater access to corporate financing. Therefore, it is necessary to set out minimum requirements in targeted areas of national insolvency proceedings, which have a significant impact on the efficiency and length of such proceedings, especially on cross-border insolvency proceedings.

(4) The integration of the internal market in the area of insolvency laws pursued by this Directive is a key tool for a more efficient functioning of the capital markets in the European Union, including greater access to corporate debt financing. Therefore, it is necessary to set out minimum requirements in targeted areas of national insolvency proceedings, which have a significant impact on the efficiency and length of such proceedings, especially on cross-border insolvency proceedings.

Text proposed by the Commission

Amendment

(4a) The harmonisation of insolvency proceedings is associated with lower costs of credit, increased access to credit and improved creditor recovery and it could also serve as an effective protection for workers. At the same time, one of the goals when completing the Capital Market Union is to stimulate more equity financing.

Text proposed by the Commission

Amendment

(5a) The minimum standards provided for in this Directive aim to approximate the insolvency laws of the Member States, taking into account, in particular, the following objectives: to maximise legal certainty as to the value of companies; to improve the efficiency of insolvency proceedings in terms of both costs and duration; to improve the predictability and fair distribution of value among creditors; and to preserve the operations and viability of companies.

Text proposed by the Commission

Amendment

(6) The scope of the legal acts that could be challenged under the avoidance actions rules should be drawn broadly, in order to cover any human behaviour with legal effects. The principle of equal treatment of creditors implies that legal acts should also include omissions, as it makes no significant difference if creditors suffer a detriment as a consequence of an action or of the passivity of the party concerned. For instance, it makes no difference whether a debtor actively waives a claim against his or her obligor or whether he or she remains passive and accepts the claim to become time-barred. Further examples of omissions that may be subject to avoidance actions include the omission to challenge a disadvantageous judgement or other decisions of courts or public authorities or the omission to register an intellectual property right. For the same reason, avoidance rules should not be restricted to legal acts performed by the debtor, but should also include legal acts performed by the counterparty or by a third party. On the other hand, only legal acts should be subject to avoidance rules which are detrimental to the general body of creditors.

(6) The scope of the legal acts that could be challenged under the avoidance actions rules should be interpreted broadly, in order to cover any human behaviour with legal effects that is detrimental to the general body of creditors. The principle of equal treatment of creditors implies that legal acts should also include omissions, as it makes no significant difference if creditors suffer a detriment as a consequence of an action or of the passivity of the party concerned. For instance, it makes no difference whether a debtor actively waives a claim against his or her obligor or whether he or she remains passive and accepts the claim to become time-barred. Further examples of omissions that may be subject to avoidance actions include the omission to challenge a disadvantageous judgement or other decisions of courts or public authorities or the omission to register an intellectual property right. For the same reason, avoidance rules should not be restricted to legal acts performed by the debtor, but should also include legal acts performed by the debtor’ s counterparty or by a third party. On the other hand, only legal acts should be subject to avoidance rules which are detrimental to the general body of creditors.

Text proposed by the Commission

Amendment

(8) In the context of avoidance actions, a distinction should be made between legal acts where the claim of the counterparty was due and enforceable and has been satisfied in the owed manner (congruent coverages) and those where performance was not entirely in accordance with the creditor’s claim (incongruent coverage). Incongruent coverages include, in particular, premature payments, the satisfaction with unusual means of payments, the subsequent collateralisation of a so far unsecured claim which was not already agreed upon in the original debt agreement, granting an extraordinary termination right or other amendments not provided for in the underlying contract, the waiver of legal defences or objections or the acknowledgement of disputable debts. In the case of congruent coverages, the avoidance ground of preferences can only be invoked if the creditor of the legal act that can be declared void knew, or should have known, at the time of the transaction that the debtor was insolvent.

(8) In the context of avoidance actions, a distinction should be made between legal acts where the claim of the counterparty was due and enforceable and has been satisfied in the owed manner (congruent coverages) and those where performance was not entirely in accordance with the creditor’s claim (incongruent coverage). Incongruent coverages include, in particular, premature payments, the satisfaction with unusual means of payments, the subsequent collateralisation of a so far unsecured claim which was not already agreed upon in the original debt agreement, granting an extraordinary termination right or other amendments not provided for in the underlying contract, the waiver of legal defences or objections or the acknowledgement of disputable debts. In the case of congruent coverages, the avoidance ground of preferences can only be invoked if the creditor of the void, voidable or unenforceable legal act that knew, at the time of the transaction, that the debtor was insolvent.

Text proposed by the Commission

Amendment

(9) Certain congruent coverages, namely legal acts that are performed directly against fair consideration to the benefit of the insolvency estate, should be exempted from the scope of legal acts that can be declared void. Those legal acts aim at supporting the ordinary daily activity of the debtor’s business. Legal acts falling under this exception should have a contractual basis, and require the direct exchange of the mutual performances, but not necessarily a simultaneous exchange of performances, as, in some cases, unavoidable delays may result from practical circumstances. However, this exemption should not cover the granting of credit. Furthermore, performance and counter-performance in those legal acts should have an equivalence in value. At the same time, the counter-performance should benefit the estate and not a third party. This exception should cover, in particular, prompt payment of commodities, wages, or service fees, in particular for legal or economic advisors; cash or card payment of goods necessary for the debtor’s daily activity; delivery of goods, products, or services against payment by return; creation of a security right against disbursement of the loan; prompt payment of public fees against consideration (e.g. admittance to public grounds or institutions).

(9) Certain congruent coverages, namely legal acts that are performed directly against fair consideration to the benefit of the debtor’s asset, should be exempted from the scope of voidable and unenforceable legal acts. Those legal acts aim at supporting the ordinary daily activity of the debtor’s business. Legal acts falling under this exemption should have a contractual basis, and require the direct exchange of the mutual performances, but not necessarily a simultaneous exchange of performances, as, in some cases, unavoidable delays may result from practical circumstances. However, this exemption should not cover the granting of credit. Furthermore, performance and counter-performance in those legal acts should have an equivalence in value. At the same time, the counter-performance should benefit the debtor and not a third party. This exemption should cover, in particular, prompt payment of commodities, wages, or service fees, in particular for legal or economic advisors; cash or card payment of goods necessary for the debtor’s daily activity; delivery of goods, products, or services against payment by return; creation of a security right against disbursement of the loan; prompt payment of public fees against consideration (e.g. admittance to public grounds or institutions). In addition, it should also cover, where relevant, contribution payments to social security authorities and entering into netting arrangements.

Text proposed by the Commission

Amendment

(10) New- or interim financing provided during a restructuring attempt, including in the course of a preventive insolvency procedure under Title II of Directive (EU) 2019/1023 of the European Parliament and of the Council33 , should be protected in subsequent insolvency proceedings. Consequently, avoidance actions on the ground of preferences should not be permitted against payments to or collateralisation in favour of the providers of such new- or interim financing, if those payments or collateralisations are performed in accordance with the claims of the providers. Such payments or collateralisation should be considered, therefore, as legal acts performed directly against fair consideration to the benefit of the insolvency estate.

(10) New financing or interim financing provided during a restructuring attempt, including in the course of a preventive insolvency procedure under Title II of Directive (EU) 2019/1023 of the European Parliament and of the Council33, should be protected in subsequent insolvency proceedings. Consequently, avoidance actions on the ground of preferences should not be permitted against payments to or collateralisation in favour of the providers of such new- or interim financing, if those payments or collateralisations are performed in accordance with the claims of the providers. Such payments or collateralisation should be considered, therefore, as legal acts performed directly against fair consideration to the benefit of the insolvency estate.

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33 Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132 (Directive on restructuring and insolvency) (OJ L 172, 26.6.2019, p. 18).

33 Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132 (Directive on restructuring and insolvency) (OJ L 172, 26.6.2019, p. 18).

Text proposed by the Commission

Amendment

(11) The main consequence of declaring a legal act void in avoidance proceedings is the obligation for the party benefiting from the legal act that has been declared void to compensate the insolvency estate for the detriment caused by such legal act. Compensation should include emoluments, where relevant, and interest, in accordance with the applicable general civil law. The compensation implies the payment of a sum equivalent to the value of the performance received if it cannot be returned in natura to the insolvency estate.

(11) The main consequence of a legal act being void, voidable or unenforceable in avoidance proceedings is the obligation for the party benefiting from the void, voidable or unenforceable legal act to compensate the insolvency estate for the detriment caused by such legal act. Compensation should include emoluments, where relevant, and interest, in accordance with the applicable civil law. The compensation implies the payment of a sum equivalent to the value of the performance received if it cannot be returned in natura to the insolvency estate. It should be possible to bring avoidance actions against individual successors of the debtor if they acquired the asset against no or manifestly inadequate consideration or if they acquired the asset while knowing the circumstances on which the avoidance actions are based.

Text proposed by the Commission

Amendment

(12) Parties who are closely related to the debtor, such as relatives in case the debtor is a natural person or actors fulfilling decisive roles in relation to a debtor that is a legal entity, usually enjoy an information advantage with regard to the financial situation of the debtor. In order to prevent abusive behaviours, additional safeguards should be established. Consequently, in the context of avoidance actions, legal presumptions about the knowledge of the circumstances on which the conditions for avoidance were based should be introduced when the other party involved in the legal act that can be declared void is a party closely related to the debtor. These presumptions should be rebuttable and should aim at reversing the burden of proof to the benefit of the insolvency estate.

(12) Parties who are closely related to the debtor, such as relatives in case the debtor is a natural person or actors fulfilling decisive roles in relation to a debtor that is a legal entity, usually enjoy an information advantage with regard to the financial situation of the debtor. In order to prevent abusive behaviours, additional safeguards should be established. Consequently, in the context of avoidance actions, legal presumptions about the knowledge of the circumstances on which the conditions for avoidance were based should be introduced when the other party involved in the void, voidable and unenforceable legal act is a party closely related to the debtor. These presumptions should be rebuttable and should aim at reversing the burden of proof to the benefit of the insolvency estate.

Text proposed by the Commission

Amendment

(13) Improving the possibilities of insolvency practitioners to identify and trace assets belonging to the insolvency estate is essential for the maximisation of the value of that estate. When performing their duties, insolvency practitioners may, already now, access information held in public data registers, partly set up by Union law and interconnected at European level, such as the Business Registers Interconnection System (BRIS), the system of Insolvency Registers Interconnection (IRI) or the Beneficial Ownership Registers Interconnection System (BORIS). Accessing the information held in public databases, however, is often not satisfactory to identify and trace important assets that are or should be in the perimeter of the insolvency estate. In particular, insolvency practitioners face practical difficulties when they try to access asset registers situated abroad.

(13) Improving the means available for insolvency practitioners to identify and trace assets belonging to the insolvency estate, including those subject to avoidance actions, is essential for the maximisation of the value of that estate. When performing their duties, insolvency practitioners may, already now, access information held in public data registers, partly set up by Union law and interconnected at European level, such as the Business Registers Interconnection System (BRIS), the system of Insolvency Registers Interconnection (IRI) or the Beneficial Ownership Registers Interconnection System (BORIS). Accessing the information held in public databases, however, is often not satisfactory to identify and trace important assets that are or should be in the perimeter of the insolvency estate. In particular, insolvency practitioners face practical difficulties when they try to access asset registers situated in a Member State other than that in which they have been appointed.

Text proposed by the Commission

Amendment

(15) Prompt direct access to centralised bank account registries or data retrieval systems is often indispensable for the maximisation of the value of the insolvency estate. Therefore, rules should be laid down granting direct access to information held in centralised bank account registries or data retrieval systems to designated Member States’ courts that have jurisdiction in insolvency proceedings. Where a Member State provides access to bank account information through a central electronic data retrieval system, that Member State should ensure that the authority operating the retrieval system reports search results in an immediate and unfiltered way to the designated courts.

(15) Prompt direct access to bank account registers is often indispensable for the maximisation of the value of the insolvency estate. Therefore, rules should be laid down granting direct access to information held in bank account registers for the designated courts or authorities of the Member States. Where a Member State provides access to bank account information through a central electronic data retrieval system, that Member State should ensure that the authority operating the retrieval system reports search results in an immediate and unfiltered way to the designated courts or administrative authorities.

Text proposed by the Commission

Amendment

(16) In order to respect the right to the protection of personal data and the right to privacy, direct and immediate access to bank account registries should be granted only to courts with jurisdiction in insolvency proceedings that are designated by the Member States for that purpose. Insolvency practitioners should therefore be allowed to access information held in the bank account registries only indirectly by requesting the designated courts in their Member State to access and run the searches.

(16) In order to respect the right to the protection of personal data and the right to privacy, direct and immediate access to bank account registers should be granted to courts or administrative authorities that are designated by the Member States for that purpose. Insolvency practitioners should therefore be allowed to access information held in the bank account registers indirectly by requesting the designated courts or administrative authorities in their Member State to access the bank account registers and perform the searches. Member States should be able to designate different courts or administrative authorities for the purpose of accessing bank account registers domestically or across borders through the bank account registers interconnection system (BARIS) referred to in Directive (EU) 2024/1640 of the European Parliament and of the Council1a. Member States should be also able to provide that courts or authorities other than the courts or administrative authorities designated under this Directive verify the conditions for accessing and searching bank account information. Access to bank account information should be granted only on a case-by-case basis, where relevant to specific insolvency proceedings for the purpose of identifying and tracing assets belonging to the insolvency estate, as well as assets subject to avoidance actions. However, Member States should be able to adopt or maintain national rules that allow insolvency practitioners to access and search their bank account registers.

Text proposed by the Commission

Amendment

(17) Directive (EU) YYYY/XX of the European Parliament and of the Council34 [OP: Directive which replaces Directive 2015/849] provides that the centralised automated mechanisms are interconnected via the bank account registers (BAR) single access point, to be developed and operated by the Commission. Considering the growing importance of insolvency cases with cross-border implications and the importance of relevant financial information for the purposes of maximising the value of the insolvency estate in insolvency proceedings, the designated national courts having jurisdiction in insolvency matters should be able to directly access and search the centralised bank account registries of other Member States through the BAR single access point put in place pursuant to Directive (EU) YYYY/XX [OP: Directive which replaces Directive 2015/849].

(17) Directive (EU) 2024/1640 of the European Parliament and of the Council34  provides that centralised automated mechanisms, such as central registers or central electronic data retrieval systems, are interconnected via BARIS, which is to be developed and operated by the Commission. Considering the growing importance of insolvency cases with cross-border implications and the importance of relevant financial information for the purposes of maximising the value of the insolvency estate in insolvency proceedings, the designated courts or administrative authorities should be able to access and search the bank account registers of other Member States directly through BARIS.

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34 OJ

34 OJ L, 2024/1640, 19.6.2024, ELI: http://data.europa.eu/eli/dir/2024/1640/oj.

Text proposed by the Commission

Amendment

(17a) Access by the courts or administrative authorities designated under this Directive to bank account information across borders through BARIS is based on the mutual trust among Member States derived from their respect of fundamental rights and of the principles recognised by Article 6 of the Treaty on European Union (TEU) and by the Charter of Fundamental Rights of the European Union (the ‘Charter’), as well as the fundamental rights and principles provided for in international law and international agreements to which the Union or all the Member States are party, including the European Convention for the Protection of Human Rights and Fundamental Freedoms, and in Member States’ constitutions, in their respective fields of application. The power to access and search bank account information through BARIS pursuant to this Directive should be exercised in compliance with Union and national rules, as well as national procedural safeguards on the protection of personal data.

Text proposed by the Commission

Amendment

(19) Directive (EU) 2015/849 of the European Parliament and the Council35 ensures that persons who are able to demonstrate a legitimate interest are granted access to beneficial ownership information on trusts and other types of legal arrangements, in accordance with data protection rules. Those persons are granted access to information on the name, month and year of birth and the country of residence and nationality of the beneficial owner, as well as the nature and extent of beneficial interest held. It is essential that insolvency practitioners can quickly and easily access that set of information for performing their tasks to trace assets in the context of ongoing insolvency proceedings. It is therefore necessary to clarify that in such a case access by insolvency practitioners constitutes a legitimate interest. At the same time, the scope of data directly accessible by the insolvency practitioners should not be broader than the scope of data accessible by other parties having a legitimate interest.

(19) Directive (EU) 2024/1640 ensures that persons with a legitimate interest are granted access to beneficial ownership information, in accordance with data protection rules. For the purpose of tracing assets in the context of ongoing insolvency proceedings, insolvency practitioners should be granted access in a timely manner to specific categories of beneficial ownership information, such as on the name, month and year of birth and the country of residence and nationality of the beneficial owner, as well as the nature and extent of beneficial interest held. At the same time, the scope of data directly accessible by the insolvency practitioners could be broader than the scope of data accessible by other parties having a legitimate interest.

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35 Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141 5.6.2015, p. 73).

Text proposed by the Commission

Amendment

(20) To ensure that assets can be efficiently traced in the context of cross-border insolvency proceedings, insolvency practitioners appointed in a Member State should be granted expeditious access to asset registers also when these registers are located in a different Member State. Therefore, the access conditions applying to foreign insolvency practitioners should not be more cumbersome than those applying to domestic insolvency practitioners.

(20) To ensure that assets can be efficiently traced in the context of cross-border insolvency proceedings, insolvency practitioners appointed in a Member State should be granted expeditious access to national registers and databases, even when these registers and databases are located in a Member State other than that in which the insolvency practitioner was appointed. Access should be provided without the involvement of any intermediary court or authority, allowing insolvency practitioners to communicate directly with the entities operating or maintaining the national registers or databases concerned. Member States should provide that insolvency practitioners can directly search datasets contained in such registers or databases. Therefore, the access conditions applying to foreign insolvency practitioners should not be more cumbersome than those applying to domestic insolvency practitioners. Therefore, the Member States should ensure that access to national registers and databases is not denied solely on the basis that the applicant is aninsolvency practitioner established in another Member State.

Text proposed by the Commission

Amendment

(20a) In order to establish an effective and consistent system for the enforcement of debts against the assets of debtors, it is essential to prevent debtors from concealing their assets, including through the acquisition of financial instruments, such as securities. The differences between national settlement systems, as well as the varying types and characteristics of financial instruments, can give rise to difficulties in accessing records and in identifying the ultimate beneficial owner of a financial instrument. Therefore, irrespective of the kind of existing register, database or other source of information a Member State uses, it is necessary for Member States to have in place the framework to facilitate the tracing and identification of the owners of financial instruments by making those national registers and databases accessible upon request under this Directive.

Text proposed by the Commission

Amendment

(22) It is generally assumed that more value can be recovered in liquidation by selling the business (or part thereof) as a going concern rather than by piecemeal liquidation. In order to promote going-concern sales in liquidation, national insolvency regimes should include a pre-pack proceeding, where the debtor in financial distress, with the help of a “monitor”, seeks possible interested acquirers and prepares the sale of the business as a going concern before the formal opening of insolvency proceedings, so that the assets can be quickly realised shortly after the opening of the formal insolvency proceedings. The pre-pack proceedings should consist of two phases, namely a preparation phase and a liquidation phase.

(22) It is generally assumed that more value can be recovered in liquidation by selling the business (or part thereof) as a going concern rather than by piecemeal liquidation. In order to promote going-concern sales in liquidation, national insolvency regimes should include a pre-pack proceeding, where the debtor in financial distress, with the help of a “monitor”, seeks possible interested acquirers and prepares the sale of the business as a going concern before the formal opening of insolvency proceedings, so that the assets can be quickly realised shortly after the opening of the formal insolvency proceedings. In order to guarantee that the sale process is prepared in a fair way, the monitor should be independent of the debtor, the debtor’s shareholders, the creditors and any other party having a legal or economic interest in the debtor or the debtor’s business. The pre-pack proceedings should consist of two phases, namely a preparation phase and a liquidation phase. Those phases should respect the principles applicable to judicial proceedings in each Member State.

Text proposed by the Commission

Amendment

(22a) The introduction of pre-pack proceedings should not lead to restrictions in the scope of action of insolvency practitioners in the context of regular insolvency proceedings. Such insolvency practitioners should continue to be authorised to seek a sale of the business.

Text proposed by the Commission

Amendment

(24) The pre-pack proceedings should ensure that the monitor appointed in the preparation phase might propose the best bid obtained during the sale process for authorisation by the court only if it declares that, in its view, piecemeal liquidation would not recover manifestly more value for creditors than the market price obtained for the business (or part thereof) as a going concern. The going-concern value is, as a rule, higher than the piecemeal liquidation value because it is based on the assumption that the business continues its activity with the minimum of disruption, has the confidence of financial creditors, shareholders and clients and continues to generate revenues. Therefore, the monitor’s declaration should not require a valuation being made in every case. The monitor should only reasonably conclude that the sale price is not significantly lower than the proceeds that could be recovered through a piecemeal liquidation. However, an increased scrutiny should be required from the monitor or the insolvency practitioner in cases where the only existing offer is made by a party who is closely related to the debtor. In such situations, the monitor or the insolvency practitioner should reject the offer if it does not satisfy the best-interest-of-creditors test.

(24) The pre-pack proceedings should ensure that the monitor submits for authorisation to the court or competent authority the best bid obtained during the preparation phase. It should be possible to require the monitor to assess and state whether the piecemeal liquidation would not recover manifestly more value for creditors than the market price obtained through the sale of the business (or part thereof) as a going concern. The going-concern value is, as a rule, higher than the piecemeal liquidation value because it is based on the assumption that the business continues its activity with the minimum of disruption, has the confidence of financial creditors, shareholders and clients and continues to generate revenues. Therefore, the monitor’s declaration should not require a valuation being made in every case. National law might require the monitor to take into account elements other than price, including the public interest or ensuring the viability of a business. However, an increased scrutiny should be required from the monitor or the insolvency practitioner in cases where the only existing offer is made by a party who is closely related to the debtor. In such situations, a valuation should be required and the monitor or the insolvency practitioner should reject the offer if it does not satisfy the best-interest-of-creditors test.

Text proposed by the Commission

Amendment

(25) In order to guarantee that the business is sold at the best market value during the pre-pack proceedings, Member States should either ensure high standards of competitiveness, transparency and fairness of the sale process conducted in the preparation phase, or provide that the court runs a brief public auction after the opening of the liquidation phase of the proceedings.

(25) In order to guarantee that the business is sold at the best market value during the pre-pack proceedings, Member States should ensure high standards of competitiveness, transparency and fairness of the sale process conducted in the preparation phase. The court should be able to decide to run a brief public auction after the opening of the liquidation phase of the proceedings if there are credible suspicions of abuse in the preparatory phase.

Text proposed by the Commission

Amendment

(25a) In order to give full effect to the objective of insolvency proceedings, namely the collective realisation of claims against the debtor, it is necessary that all creditors holding claims against the insolvent debtor participate in the proceedings. By so participating, it should be possible for such claims to be duly recorded, examined and satisfied in accordance with the applicable insolvency framework.

Text proposed by the Commission

Amendment

(26) If a Member State opts to require high standards in the preparation phase, the monitor (subsequently to be appointed as insolvency practitioner in the liquidation phase) should be responsible for ensuring that the sale process is competitive, transparent, fair and meets market standards. Complying with market standards in this context should require that the process is compatible with the standard rules and practice on mergers and acquisitions in the Member State concerned, which includes an invitation to potentially interested parties to participate in the sale process, disclosing the same information to potential buyers, enabling the exercise of due diligence by interested acquirers, and obtaining the offers from the interested parties through a structured process.

(26) In the preparation phase, the monitor (subsequently to be appointed as insolvency practitioner in the liquidation phase, unless the monitor resigns or is unable to perform the required functions) should be responsible for ensuring that the sale process is competitive, transparent, fair and meets market standards. Complying with market standards in this context should require that the process is compatible with the standard rules and practice on mergers and acquisitions in the Member State concerned, which includes an invitation to potentially interested parties to participate in the sale process, disclosing the same information to potential buyers, enabling the exercise of due diligence by interested acquirers, and obtaining the offers from the interested parties through a structured process.

Text proposed by the Commission

Amendment

(27) If a Member State opts to provide that the court runs a public auction after the opening of the liquidation phase, the offer selected by the monitor during the preparation phase should be used as an initial bid (‘stalking horse bid’) during the auction. The debtor should be able to offer incentives to the ‘stalking horse bidder’ by agreeing, in particular, to expense reimbursements or break-up fees in the case a better offer is selected through the public auction. Member States should, nevertheless, ensure that such incentives given by the debtors to the ‘stalking horse bidders’ during the preparation phase are commensurate and do not deter other potentially interested bidders from participating in the public auction in the liquidation phase.

(27) If the court or the administrative authority runs a public auction after the opening of the liquidation phase, the offer selected by the monitor during the preparation phase should be used as an initial bid (‘stalking horse bid’) during the auction. The debtor should be able to offer incentives to the ‘stalking horse bidder’ by agreeing, in particular, to expense reimbursements or break-up fees in the case a better offer is selected through the public auction. Member States should, nevertheless, ensure that such incentives given by the debtors to the ‘stalking horse bidders’ during the preparation phase are commensurate and do not deter other potentially interested bidders from participating in the public auction in the liquidation phase.

Text proposed by the Commission

Amendment

(27a) Monitors should take their actions in writing and should make them available, in digital format and in a timely manner, only to the parties involved in the preparation phase in order to secure the necessary confidentiality of all information obtained in connection with the preparation phase.

Text proposed by the Commission

Amendment

(28) The opening of insolvency proceedings should not result in the early termination of contracts under which the parties still have obligations to perform (executory contracts), which are necessary for the continuation of business operations. Such termination would unduly jeopardise the value of the business, or part thereof, to be sold in the pre-pack proceedings. It should, therefore, be ensured that those contracts are assigned to the acquirer of the business of the debtor or part thereof, even without the consent of the counterparty of the debtor to those contracts. Nonetheless, there are situations where the assignment of the executory contracts cannot be reasonably expected, such as when the acquirer is a competitor of the counterparty of the contract. Similarly, the court may come to the conclusion in an individual assessment of an executory contract that its termination would serve the interests of the business of the debtor better than its assignment, such as when the assignment of the contract would result in a disproportionate burden for the business. The court should not be allowed, however, to terminate executory contracts relating to licenses of intellectual and industrial property rights, as they are usually key components of the operations of the business being sold.

(28) The opening of insolvency proceedings should not result in the early termination of contracts under which the parties still have obligations to perform (executory contracts), which are necessary for the continuation of business operations. Such termination would unduly jeopardise the value of the business, or part thereof, to be sold in the pre-pack proceedings. It should, therefore, be ensured that those contracts are assigned to the acquirer of the business of the debtor or part thereof, even without the consent of the counterparty of the debtor to those contracts, unless the court considers that consent is necessary to protect the interests of the debtor’s counterparties. Nonetheless, there are situations where the assignment of the executory contracts cannot be allowed, such as when the acquirer is a competitor of the counterparty of the contract. Similarly, the court may come to the conclusion in an individual assessment of an executory contract that its termination would serve the interests of the business of the debtor better than its assignment, such as when the assignment of the contract would result in a disproportionate burden for the business. The court should not be allowed, however, to terminate executory contracts relating to licenses of intellectual and industrial property rights, as well as for credit or financial services contracts, as they are usually key components of the operations of the business being sold.

Text proposed by the Commission

Amendment

(29) The possibility to enforce pre-emption rights in the course of the sale process would distort competition in the pre-pack proceedings. Potential bidders might abstain from bidding because of rights that would discard their offers at the holder’s discretion, irrespective of the time and resources invested and the economic value of the offer. In order to ensure that the winning offer reflects the best available price on the market, pre-emption rights should not be conceded to bidders, nor should such rights be enforced in the course of the bidding process. Holders of pre-emption rights that were granted prior to the commencement of the pre-pack proceedings, instead of invoking their option, should be invited to participate in the bidding.

(29) The possibility to enforce pre-emption rights in the course of the sale process would distort competition in the pre-pack proceedings. That consideration cannot prevent a court from reserving a right of pre-emption for an undertaking participating in an essential strategic interest. Potential bidders might abstain from bidding because of rights that would discard their offers at the holder’s discretion, irrespective of the time and resources invested and the economic value of the offer. In order to ensure that the winning offer reflects the best available price on the market, pre-emption rights should not be conceded to bidders, nor should such rights be enforced in the course of the bidding process. Holders of pre-emption rights that were granted prior to the commencement of the pre-pack proceedings, instead of invoking their option, should be invited to participate in the bidding.

Text proposed by the Commission

Amendment

(32) Directors oversee the management of the affairs of a legal entity and have the best overview of its financial situation. Directors are therefore among the first to realise whether a legal entity is approaching or surpassing the brink of insolvency. A late filing for insolvency by directors may lead to lower recovery values for creditors Member States should therefore introduce an obligation on directors to submit a request for the opening of insolvency proceedings within a specified time-period. Member States should also define to whom the directors’ duties should apply taking into account that the notion of “director” should be interpreted broadly, to cover all persons who are in charge of making or do in fact make or ought to make key decisions with respect to the management of a legal entity.

(32) Directors oversee the management of the affairs of a legal entity and have the best overview of its financial situation. Directors are therefore among the first to realise whether a legal entity is insolvent. A late filing for insolvency by directors may lead to lower recovery values for creditors Member States should therefore introduce an obligation on directors to submit a request for the opening of insolvency proceedings within a specified time-period. Member States should also define the notion of “director”.

Text proposed by the Commission

Amendment

(32a) Member States should set a deadline for the duty to submit a request for the opening of insolvency proceedings. That deadline should be no later than three months from the date on which the directors became aware that the company was insolvent. If the company regains its solvency before that deadline, Member States should be able to provide that a new period starts if the company becomes insolvent again thereafter.

Text proposed by the Commission

Amendment

(33) To ensure that directors do not act in their self-interest by delaying the submission of a request for the opening of insolvency proceedings, despite signs of insolvency, Member States should lay down provisions making directors civilly liable for a breach of the duty to submit such a request. In that case directors should compensate creditors for the damages resulting from the deterioration in the recovery value of the legal entity compared to the situation where the request would have been submitted on time. Member States should be able to adopt or maintain national rules on civil liability of directors related to the filing for insolvency that are stricter than those laid down by this Directive.

(33) To ensure that directors do not act in their self-interest by delaying the submission of a request for the opening of insolvency proceedings, despite signs of insolvency, Member States should lay down provisions making directors civilly liable for a breach of the duty to submit such a request. In that case directors should compensate creditors for the damages resulting from the deterioration in the recovery value of the legal entity compared to the situation where the request would have been submitted on time. Member States should be able to adopt or maintain national rules on civil liability of directors related to the filing for insolvency that are stricter than those laid down by this Directive. In some cases, the signs of insolvency can be circumstantial and temporary and skilled directors should be given the opportunity to explore restructuring measures that could reasonably lead to the same outcome for creditors. Therefore, Member States should be permitted to provide for a derogation from the obligation to commence insolvency procedures while ensuring that the rights of the creditors are equally protected. Where there is no duty to request the opening of insolvency proceedings, Member States should be able to take other, equivalent measures, such as making directors personally liable.

Text proposed by the Commission

Amendment

(33a) In order to promote an efficient and inclusive insolvency framework that supports entrepreneurship and economic renewal, Member States should be able to maintain or introduce simplified winding-up proceedings for microenterprises, while upholding the high standards of transparency and fairness provided for in this Directive and under other relevant instruments. Given the limited resources typically available to such businesses, it is essential that the Member States ensure that those proceedings are accessible even in cases where the debtor has no assets or where the available assets are insufficient to cover the procedural costs or the cost for the involvement of an insolvency practitioner. Such an approach would help avoid situations where honest but insolvent entrepreneurs are trapped in inactivity due to inaccessible formal procedures, thereby enabling a fresh start and contributing to a fairer and more resilient internal market.

Text proposed by the Commission

Amendment

(34) Microenterprises often take the form of sole proprietorships or small partnerships whose founders, owners or members do not enjoy limited liability protection and thus are exposed to unlimited liability for business debts. Where microenterprises operate as limited liability entities, limited liability protection is usually illusory for microenterprises owners because they are often expected to secure microenterprises business debts using their personal assets as collateral. Moreover, since microenterprises heavily depend on payments from their clients they often face cash-flow problems and higher default risks that follow from the loss of a significant business partner or from late payments by their clients. In addition, microenterprises also face scarcity of working capital, higher interest rates and larger collateral requirements, which make raising finance, especially in situations of financial distress, difficult, if not impossible. As a consequence, they may be prone to insolvency more often than larger enterprises.

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Text proposed by the Commission

Amendment

(35) National insolvency rules are not always fit to treat insolvent microenterprises properly and in a proportionate manner. Taking into account the unique characteristics of microenterprises and their specific needs in financial distress, in particular the need for faster, simpler, and affordable procedures should be acknowledged, separate insolvency proceedings should be developed at national level in accordance with the provisions of this Directive. Although the provisions of this Directive concerning simplified winding-up proceedings only apply to microenterprises, it should be possible for Member States to extend their application also to small and medium-sized enterprises that are not microenterprises.

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Text proposed by the Commission

Amendment

(36) It is appropriate to ensure that the conduct and oversight of simplified winding-up proceedings may be entrusted by Member States to a competent authority which is either a court or an administrative body. The choice would depend, among other things, on the administrative and legal systems of the Member States as well as the capacities of courts and the need to ensure cost-efficiency and speed of proceedings.

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Text proposed by the Commission

Amendment

(37) The cessation of payments test and the balance sheet test are the two usual triggers among Member States for opening of standard insolvency proceedings. The balance sheet test may however be unfeasible for microenterprise debtors, particularly where the debtor is an individual entrepreneur, because of a possible lack of proper record and of a clear distinction between personal assets and liabilities and business assets and liabilities. Therefore, the inability to pay debts as they mature should be the criterion for the opening of simplified winding-up proceedings. Member States should also define the specific conditions under which this criterion is met, as long as these conditions are clear, simple and easily ascertainable by the microenterprise concerned.

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Text proposed by the Commission

Amendment

(38) In order to establish cost-effective and expeditious simplified winding-up proceedings for microenterprises, short deadlines should be introduced. Similarly, formalities for all procedural steps, including for the opening of the proceedings, the lodgement and the admission of claims, the establishment of the insolvency estate and the realisation of the assets should be minimised. A standard form should be used for submitting a request to open simplified winding-up proceedings and electronic means should be used for all communications between the competent authority, and where relevant, the insolvency practitioner, and the parties to the proceedings.

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Text proposed by the Commission

Amendment

(39) All microenterprises should be able to commence proceedings to address their financial difficulties and obtain a discharge. Access to simplified winding-up proceedings should not depend on the microenterprise’s ability to cover the administrative costs of such proceedings. The laws of the Member States should introduce rules for covering the costs of administering simplified winding-up proceedings where assets and sources of revenue of the debtor are insufficient to cover those costs.

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Text proposed by the Commission

Amendment

(40) In simplified winding-up proceedings, the appointment of an insolvency practitioner is usually unnecessary given the simple business operations carried out by the microenterprises that make their supervision by the competent authority possible and sufficient. Therefore, the debtor should remain in control of its assets and day-to-day operation of the business. At the same time, to ensure that simplified winding-up proceedings can be conducted effectively and efficiently, the debtor should, upon commencement of and throughout the proceedings, provide accurate, reliable and complete information relating to its financial position and business affairs.

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Text proposed by the Commission

Amendment

(41) A microenterprise debtor should be able to benefit from a temporary stay of individual enforcement actions, in order to be able to preserve the value of the insolvency estate and ensure a fair and orderly conduct of the proceedings. Member States, however, may allow competent authorities to exclude certain claims from the scope of the stay, in well-defined circumstances.

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Text proposed by the Commission

Amendment

(42) Disputed claims should be dealt with in a way that does not unnecessarily complicate the conduct of simplified winding-up proceedings for microenterprises. If disputed claims cannot be quickly dealt with, the ability to dispute a claim may be used to create unnecessary delays. In deciding on the treatment of a disputed claim, the competent authority should be empowered to allow the continuation of the simplified winding-up proceedings with respect to undisputed claims only.

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Text proposed by the Commission

Amendment

(43) In the context of simplified winding-up proceedings, avoidance actions should only be brought by a creditor or, where appointed, by the insolvency practitioner. In taking the decision to convert the simplified winding-up proceedings to standard insolvency proceedings for the purpose of the conduct of avoidance proceedings, the competent authority should weigh various considerations, including the anticipated cost, duration and complexity of avoidance proceedings, the likelihood of the successful recovery of assets and expected benefits to all creditors.

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Text proposed by the Commission

Amendment

(44) Member States should ensure that the assets of the insolvency estate in simplified winding-up proceedings can be realised through public on-line judicial auction, if the competent authority considers this means of realisation of assets as appropriate. For this reason, Member States should ensure that one or more electronic auction systems are maintained in their territory for that purposes. This obligation should be without prejudice to the multiple platforms that exist in some Member States for on-line judicial auctions of specific types of assets.

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Text proposed by the Commission

Amendment

(45) The auction systems operated for the purposes of realising the assets of debtors in simplified winding-up proceedings should be interconnected via the European e-Justice Portal. The e-Justice Portal should serve as a central electronic access point to the on-line judicial auction processes run in the national system or systems, provide a search functionality for users and guide them to the relevant national on-line platforms if they intend to participate in the bidding. When determining the technical specifications of that interconnection system by way of implementing act, the Commission should, in accordance with the Commission's “Dual Pillar Approach"37 , present the result of the analysis of existing solutions already provided by the Commission with the potential for their reuse or should carry out a market screening for potential off-the shelf commercial solutions to use as such or with little customisation.

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37 For digital solutions, the dual pillar approach is about reusing existing solutions, including corporate building blocks, before considering ready-made market solutions. Customised development is the last option. See European Commission digital strategy Next generation digital Commission, C(2022) 4388 final, p. 13.

Text proposed by the Commission

Amendment

(46) In the case of insolvency of an unlimited liability microenterprise debtor, individuals who are personally liable for the debtor’s debts should not be personally liable for unsatisfied claims following liquidation of the insolvency estate of the debtor. Therefore, Member States should ensure that in simplified winding-up proceedings entrepreneur debtors, as well as those founders, owners or members of an unlimited liability microenterprise debtor who are personally liable for the debts of the microenterprise subject to simplified winding-up proceedings, are fully discharged from their debts. For the purpose of granting such discharge, Member States should apply Title III of Directive (EU) 2019/1023 mutatis mutandis.

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Text proposed by the Commission

Amendment

(47) It is important to ensure a fair balance between the interests of the debtor and creditors in insolvency proceedings. Creditors’ committees allow for better involvement of creditors in insolvency proceedings, in particular when creditors would otherwise be inhibited from doing so individually, due to limited resources, economic significance of their claims or the lack of geographic proximity. Creditors’ committees can especially help cross-border creditors better exercise their rights and ensure their fair treatment. Member States should allow the establishment of a creditors’ committee once proceedings are opened. A creditors’ committee should be established only provided that creditors agree. Member States may also allow to establish it before proceedings are opened and after the filing for insolvency. In this case, however, Member States should provide that creditors agree to its continuation and composition at the general meeting. If creditors disagree with the composition, they may also establish a new creditors’ committee.

(47) In order to protect creditors, this Directive strengthens the provisions concerning creditors’ committees, ensuring fair representation of all categories of creditors, including cross-border creditors, and increased transparency in the decision-making process. It is important to ensure a fair balance between the interests of the debtor and creditors in insolvency proceedings. Creditors’ committees allow for better involvement of creditors in insolvency proceedings, in particular when creditors would otherwise be inhibited from doing so individually, due to limited resources, economic significance of their claims or the lack of geographic proximity. Creditors’ committees can especially help cross-border creditors better exercise their rights and ensure their fair treatment. Member States should allow the establishment of a creditors’ committee once proceedings are opened. A creditors’ committee should be established only provided that creditors agree. Member States may also allow to establish it before proceedings are opened and after the filing for insolvency. In this case, however, Member States should provide that creditors agree to its continuation and composition at the general meeting.

Text proposed by the Commission

Amendment

(49) Member States should clarify the requirements, duties and procedures for the appointment of members of the creditors’ committee, as well as the functions attributed to the creditors’ committee. Member States should be given the option to decide whether the appointment should be done by the general meeting of creditors or by the court. To avoid undue delays in the set-up of the creditors’ committee, the members should be appointed expeditiously. Member States should cater for a fair representation of creditors in the committee and ensure that the participation in the creditors’ committee is not precluded to creditors whose claim is not yet admitted or to creditors that are resident in another Member State.

(49) Member States should clarify the requirements, duties and procedures for the appointment of members of the creditors’ committee, as well as the functions attributed to the creditors’ committee. Member States should be given the option to decide whether the appointment should be done by the general meeting of creditors or by the court. To avoid undue delays in the set-up of the creditors’ committee, the members should be appointed expeditiously. Member States should cater for a fair representation of creditors in the committee and ensure that the participation in the creditors’ committee is not precluded to creditors whose claim is not yet admitted or to creditors that are resident in another Member State. Member States should ensure that creditors are fairly represented within the committee. Member States should make sure that workers can be represented in the creditors’ committee when they are creditors.

Text proposed by the Commission

Amendment

(50) Fair representation of creditors in the creditors’ committee is particularly important in relation to unsecured creditors that are micro, small or medium-sized enterprises, which in the case of insolvency of a debtor which is a large enterprise, if not paid promptly, are also exposed to insolvency (domino effect). Proper representation in the creditors’ committee of such creditors could ensure that in the course of the distribution of the recovered proceeds they receive their parts more expeditiously.

(50) Fair representation of creditors in the creditors’ committee is particularly important for workers who are creditors and for whom a delay in the payment of wages could pose an existential threat, as well as for unsecured creditors that are micro, small or medium-sized enterprises, which in the case of insolvency of a debtor which is a large enterprise, if not paid promptly, are also exposed to insolvency (domino effect). Proper representation in the creditors’ committee of such creditors could ensure that in the course of the distribution of the recovered proceeds they receive their parts more expeditiously.

Text proposed by the Commission

Amendment

(51) An important task of the creditors’ committee should be to verify that insolvency proceedings are conducted in a way that protects creditors’ interests. The committee’s role in the monitoring of the fairness and integrity of the proceedings can only be performed effectively if the creditors’ committee and its members act independently from the insolvency practitioner and are accountable only to the creditors who established it.

(51) An important task of the creditors’ committee should be to verify that insolvency proceedings are conducted in a fair and unbiased way that protects creditors’ interests. The committee’s role in the monitoring of the fairness and integrity of the proceedings can only be performed effectively if the creditors’ committee and its members act independently from the insolvency practitioner and are accountable only to the creditors who established it. The members of the creditors’ committee should act in good faith when carrying out the functions of the committee. They should have the power to share relevant and necessary information to represented creditors and to receive information from them. Creditors, members of the creditors’ committee and any professionals employed by the creditors’ committee should maintain the confidentiality of all information obtained in connection with the committee’s activities.

Text proposed by the Commission

Amendment

(52) The number of members in the creditors’ committee should, on the one hand, be sufficiently large to ensure diversity of views and interests in the committee and, on the other hand, remain relatively limited to deliver on its tasks effectively and timely. Member States should clarify when and how the composition of the committee needs to be altered, which could happen if representatives are no longer able to act, including in the creditors’ best interests, or wish to withdraw. They should also clarify the conditions for the removal of members that acted relentlessly against creditors’ interest.

(52) Member States should clarify the number of the members in the creditors’ committee and when and how the composition of the committee needs to be altered, which could happen if representatives are no longer able to act, including in the creditors’ best interests, or wish to withdraw. They should also clarify the conditions for the removal of members that have acted relentlessly against creditors’ interests or that have a conflict of interest.

Text proposed by the Commission

Amendment

(54) Member States should ensure that the court has the power to determine the working methods for the creditors’ committee, if they are not established expeditiously. The Commission should establish standard working methods that should facilitate the task of the creditors’ committee and reduce the need for courts to intervene in the case of missing working methods.

(54) Member States should ensure that the court has the power to determine the working methods for the creditors’ committee, if they have not been established in the creditors’ committee’s protocol of working methods. The Commission should establish standard working methods that should facilitate the task of the creditors’ committee and reduce the need for courts to intervene in the case of missing working methods.

Text proposed by the Commission

Amendment

(55) The creditors’ committee should be granted sufficient rights to perform its functions efficiently and effectively. Member States should ensure that the creditors’ committee can interact with insolvency practitioners, courts, the debtor, external advisors and the creditors whom it represents, as necessary, to enable the committee to form and communicate a view on matters of direct interest and relevance to creditors, and for this view to be duly considered in proceedings. Member States could also empower the creditors’ committee to make decisions.

(55) The creditors’ committee should be granted sufficient rights to perform its functions efficiently and effectively. Member States should ensure that the creditors’ committee can interact with insolvency practitioners, courts, the debtor, external advisors and the creditors whom it represents, as necessary, to enable the committee to form and communicate a view on matters of direct interest and relevance to creditors, and for this view to be duly considered in proceedings. Member States should also empower the creditors’ committee to appoint a secretary, to request external consultations and to make decisions.

Text proposed by the Commission

Amendment

(58) To ensure an enhanced transparency of the key features of national insolvency proceedings and help especially cross-border creditors to estimate what would happen if their investments got involved in insolvency proceedings, investors and potential investors should be granted easy access to that information in a pre-defined, comparable and user-friendly format. A standardised key information factsheet should be prepared and made available to the public by Member States. This document would be key for potential investors to make a “glance-through” assessment of the insolvency proceedings rules in a given Member State. It should contain sufficient explanations to allow the reader to understand the information therein without having to resort to other documents. The key information factsheet should in particular include practical information on the insolvency trigger as well as on the steps to take to request the opening of insolvency proceedings or to lodge a claim.

(58) To ensure an enhanced transparency of the key features of national insolvency proceedings and help especially cross-border creditors to estimate what would happen if their investments got involved in insolvency proceedings, investors and potential investors should be granted easy access to that information in a pre-defined, comparable and user-friendly format. A standardised key information factsheet should be prepared and made available to the public by Member States. This document would be key for potential investors to make a “glance-through” assessment of the insolvency proceedings rules in a given Member State. It should contain sufficient explanations to allow the reader to understand the information therein without having to resort to other documents. The key information factsheet should in particular include practical information on the insolvency trigger as well as on the steps to take to request the opening of insolvency proceedings or to lodge a claim. It should be prepared in a multilinguistic format.

Text proposed by the Commission

Amendment

(59a) This Directive should be without prejudice to the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure pursuant to Directive (EU) 2016/943 of the European Parliament and of the Council1a.

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1a Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets).

Text proposed by the Commission

Amendment

1. This Directive lays down common rules on:

1. In order to maximise legal certainty concerning the value of companies, to improve the efficiency of insolvency proceedings both in terms of cost and length, to improve predictability and to ensure a fair distribution of value among creditors, this Directive lays down common rules on:

Text proposed by the Commission

Amendment

(e) simplified winding-up proceedings for microenterprises;

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Text proposed by the Commission

Amendment

(a) ‘insolvency practitioner’ means a practitioner appointed by a judicial or administrative authority in procedures concerning restructuring, insolvency and discharge of debt as referred to in Article 26 Directive (EU) 2019/1023;

(a) ‘insolvency practitioner’ means a person or body who has one or more of the functions listed in Article 2, point (5), of Regulation (EU) 2015/848 and in Article 2(1), point (12), of Directive (EU) 2019/1023;

Text proposed by the Commission

Amendment

(b) ‘court’ means the judicial body of a Member State;

(b) ‘court’ means:

Text proposed by the Commission

Amendment

(i) for the purposes of Article 18a, Title IV, with the exception of Article 21, Title V and Title VII, with the exception of Article 59(5), a judicial body of a Member State or the authority of a Member State competent for insolvency proceedings;

Text proposed by the Commission

Amendment

(ii) for the purposes of all other articles, a judicial body of a Member State;

Text proposed by the Commission

Amendment

(c) ‘competent authority’ means a judicial or administrative authority of a Member State that is responsible for conduct or oversight, or both, of simplified winding-up proceedings, in accordance with Title VI of this Directive;

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Text proposed by the Commission

Amendment

(d) ‘centralised bank account registries’ means the centralised automated mechanisms, such as central registries or central electronic data retrieval systems, put in place in accordance with Article 32 of Directive (EU) 2015/849;

(d) ‘bank account registers ’ means centralised automated mechanisms, such as central registries or central electronic data retrieval systems, put in place in accordance with Article 16 (1) of Directive (EU) 2024/1640;

Text proposed by the Commission

Amendment

(e) ‘beneficial ownership register’ means national central registers on beneficial ownership information referred to in Articles 30 and 31 of Directive (EU) 2015/849;

(e) ‘central beneficial ownership register’ means national central registers holding beneficial ownership information and the systems of interconnection of those registers as referred to in Article 10 of Directive (EU) 2024/1640;

Text proposed by the Commission

Amendment

(ea) ‘bank account information’ means the information listed in Article 16(3) of Directive (EU) 2024/1640;

Text proposed by the Commission

Amendment

(f) ‘legal act’ means any human behaviour, including an omission, producing a legal effect;

(f) ‘legal act’ means any human behaviour, producing a legal effect;

Text proposed by the Commission

Amendment

(g) ‘executory contract’ means a contract between a debtor and one or more counterparties under which the parties still have obligations to perform at the time of the opening of insolvency proceedings in the liquidation phase in Title IV;

(g) ‘executory contract’ means a contract between a debtor and one or more counterparties under which the parties still have obligations to perform at the time of the opening of insolvency proceedings in the liquidation phase in Title IV, but does not include netting agreements;

Text proposed by the Commission

Amendment

(h) ‘best-interest-of-creditors test’ means the test whereby no creditor would be worse off under a liquidation in pre-pack proceedings than such a creditor would be if the normal ranking of liquidation priorities were applied in the event of a piecemeal liquidation;

(h) ‘best-interest-of-creditors test’ means the test whereby no creditor would be worse off under a liquidation in pre-pack proceedings than such a creditor would be if the normal ranking of liquidation priorities were applied in the event of a piecemeal liquidation or the sale of the business, or a part thereof, as a going concern;

Text proposed by the Commission

Amendment

(j) ‘microenterprise’ means a microenterprise within the meaning of the Annex to Commission Recommendation 2003/361/EC;

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Text proposed by the Commission

Amendment

(k) ‘unlimited liability microenterprise’ means a microenterprise with or without separate legal personality and without limited liability protection of any of its founders, owners or members;

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Text proposed by the Commission

Amendment

(l) ‘entrepreneur’ means an entrepreneur as defined in Article 2(1), point (9) of Directive (EU) 2019/1023;

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Text proposed by the Commission

Amendment

(m) ‘full discharge of debt’ means the situation in which either i) the enforcement of outstanding dischargeable debts against entrepreneurs or against those individuals who are founders, owners or members of an unlimited liability microenterprise and are personally liable for the debts of the microenterprise is precluded or ii) outstanding dischargeable debts as such are cancelled, as part of simplified winding-up proceedings;

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Text proposed by the Commission

Amendment

(n) ‘repayment plan’ means a programme of payments of specified amounts on specified dates to creditors by a natural person benefiting from a full discharge of debt, or a plan setting out periodic transfers to creditors of a certain part of the disposable income of the natural person concerned during the discharge period;

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Text proposed by the Commission

Amendment

(q) ‘party closely related to the debtor’ means persons, including legal persons, with preferential access to non-public information on the affairs of the debtor.

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Where the debtor is a natural person, closely related parties shall include in particular:

(i) the spouse or partner of the debtor;

(ii) ascendants, descendants, and siblings of the debtor, or of the spouse or partner, and the spouses or partners of these persons;

(iii) persons living in the household of the debtor;

(iv) persons who are working for the debtor under a contract of employment with access to non-public information on the affairs of the debtor, or otherwise performing tasks through which they have access to non-public information on the affairs of the debtor, including advisers, accountants or notaries;

(v) legal entities in which the debtor or one of the persons referred to in points (i) to (iv) of this subparagraph is a member of the administrative, management or supervisory bodies or performs duties which provide for access to non-public information on the affairs of the debtor.

Where the debtor is a legal entity, closely related parties shall include in particular:

(i) any member of the administrative, management or supervisory bodies of the debtor;

(ii) equity holders with a controlling interest in the debtor;

(iii) persons which perform functions similar to those performed by persons under point (i);

(iv) persons which are closely related in accordance with the second subparagraph to the persons listed in points (i), (ii) and (iii) of this subparagraph.

Text proposed by the Commission

Amendment

1a. For the purposes of this Directive, the concepts of “insolvency” and “directors” are to be understood as defined by national law.

Text proposed by the Commission

Amendment

Relevant point in time in relation to close relatedness

Party closely related to the debtor

Text proposed by the Commission

Amendment

-1. For the purposes of this Directive, parties closely related to the debtor shall include:

(a) where the debtor is a natural person:

(i) the spouse or partner of the debtor;

(ii) ascendants, descendants, and siblings of the debtor, or of the spouse or partner of the debtor, and the spouses or partners of these persons;

(iii) persons living in the household of the debtor;

(iv) persons who are working for the debtor under a contract of employment with access to non-public information on the affairs of the debtor;

(v) legal entities in which the debtor or one of the persons referred to in points (i) to (iv) of this subparagraph is a member of the management or supervisory bodies or performs duties which provide for access to non-public information on the affairs of the debtor;

(b) where the debtor is a legal entity:

(i) any member of the management or supervisory bodies of the debtor;

(ii) equity holders with a controlling interest in the debtor;

(iii) persons which perform functions similar to those performed by persons under point (i);

(iv) persons which are closely related in accordance with the second subparagraph to the persons listed in points (i), (ii) and (iii) of this subparagraph.

Text proposed by the Commission

Amendment

1a. Paragraph -1 and paragraph 1, point (a), of this Article shall apply mutatis mutandis to the concept of persons closely related to parties which have benefitted from a void, voidable or unenforceable legal act as referred to in Article 11(2), second subparagraph.

Text proposed by the Commission

Amendment

Article 3a

National law and minimum harmonisation

1. Member States may adopt or maintain laws which provide for a greater level of protection for the general body of creditors than that provided for under Titles II, IV and VII, provided that they comply with Union law.

2. Member States may adopt or maintain laws which facilitate access by insolvency practitioners to bank account information held in their bank account registers, beneficial ownership information and national registers and databases to a greater extent than the rules provided for in Title III.

3. Member States shall ensure that, when insolvent, microenterprises have access to insolvency proceedings in situations where the debtor has no assets or its assets are not sufficient to cover the cost of the proceedings or the cost for the involvement of the insolvency practitioner.

4. Member States may adopt or maintain laws which establish simplified winding-up proceedings for microenterprises.

Text proposed by the Commission

Amendment

Article 3b

Protection of workers

This Directive is without prejudice to the application of national labour law and Union law with regard to workers’ rights, in particular Council Directives 98/59/EC1a and  2001/23/EC1b and Directives 2002/14/EC1c, 2009/38/EC1d, (EU) 2016/23411e and 2008/94/EC1f of the European Parliament and of the Council.

This Directive shall not prevent Member States from introducing or maintaining provisions relating to Title IV which provide for a greater level of protection for workers or their representatives.

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1a Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies (OJ L 225, 12.8.1998, p. 16, ELI: http://data.europa.eu/eli/dir/1998/59/oj).

1b Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses (OJ L 82, 22.3.2001, p. 16, ELI: http://data.europa.eu/eli/dir/2001/23/oj).

1c Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community (OJ L 80, 23.3.2002, p. 29, ELI: http://data.europa.eu/eli/dir/2002/14/oj) .

1d Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (OJ L 122, 16.5.2009, p. 28, ELI: http://data.europa.eu/eli/dir/2009/38/oj).

1e Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (OJ L 354, 23.12.2016, p. 37, ELI: http://data.europa.eu/eli/dir/2016/2341/oj).

1f Directive 2008/94/EC of the European Parliament and of the Council of 22 October 2008 on the protection of employees in the event of the insolvency of their employer (OJ L 283, 28.10.2008, p. 36, ELI: http://data.europa.eu/eli/dir/2008/94/oj).

Text proposed by the Commission

Amendment

Member States shall ensure that legal acts which have been perfected prior to the opening of insolvency proceedings to the detriment of the general body of creditors can be declared void under the conditions laid down in Chapter 2 of this Title.

Member States shall ensure that legal acts which have been perfected prior to the opening of insolvency proceedings to the detriment of the general body of creditors are void, voidable or unenforceable under the conditions laid down in Chapter 2 of this Title.

Text proposed by the Commission

Amendment

Member States may adopt or maintain rules that establish that, where a legal act requires registration in a public register for its perfection, the point in time from which the legal act is considered perfected can exceptionally be before the date on which the registration takes place.

Text proposed by the Commission

Amendment

Article 5

deleted

Relationship to national provisions

This Directive shall not prevent Member States from adopting or maintaining provisions relating to the voidness, voidability or unenforceability of legal acts detrimental to the general body of creditors in the context of insolvency proceedings where such provisions provide a greater protection of the general body of creditors than those set out in Chapter 2 of this Title.

Text proposed by the Commission

Amendment

Member States shall ensure that legal acts benefitting a creditor or a group of creditors by satisfaction, collateralisation or in any other way can be declared void if they were perfected:

Member States shall ensure that detrimental legal acts benefitting a creditor or a group of creditors by satisfaction or collateralisation are void, voidable or unenforceable if they were perfected:

Text proposed by the Commission

Amendment

(a) within three months prior to the submission of the request for the opening of insolvency proceedings, under the condition that the debtor was unable to pay its mature debts; or

(a) within three months prior to the submission of the request for the opening of insolvency proceedings, or, in the absence of a formal request, prior to the date of the resolution to commence insolvency proceedings, provided that the debtor was unable to pay its mature debts under national law; or

Text proposed by the Commission

Amendment

(b) after the submission of the request for the opening of insolvency proceedings.

(b) after the submission of the request or the date of the resolution referred to in point (a) and before the opening of insolvency proceedings.

Text proposed by the Commission

Amendment

If a due claim of a creditor was satisfied or secured in the owed manner, Member States shall ensure that the legal act can be declared void only if:

If a due claim of a creditor was satisfied or secured in the owed manner, Member States shall ensure that the legal act are void, voidable or unenforceable only if:

Text proposed by the Commission

Amendment

(b) that creditor knew, or should have known, that the debtor was unable to pay its mature debts or that a request for the opening of insolvency proceedings has been submitted.

(b) that creditor knew that the debtor was unable to pay its mature debts or that a request for the opening of insolvency proceedings has been submitted or that, in the absence of a formal request, a resolution to commence insolvency proceedings had been made.

Text proposed by the Commission

Amendment

The creditor’s knowledge referred to in the first subparagraph, point (b), shall be presumed if the creditor was a party closely related to the debtor.

The creditor’s knowledge referred to in the first subparagraph, point (b), shall be presumed if the creditor was a party closely related to the debtor. That presumption shall be rebuttable.

Text proposed by the Commission

Amendment

By way of derogation from paragraphs 1 and 2, Member States shall ensure that the following legal acts cannot be declared void:

By way of derogation from paragraphs 1 and 2, Member States shall ensure that the following legal acts cannot be void, voidable or unenforceable:

Text proposed by the Commission

Amendment

(a) legal acts performed directly against fair consideration to the benefit of the insolvency estate;

(a) legal acts performed directly against fair consideration to the benefit of the debtor’s assets;

Text proposed by the Commission

Amendment

(ca) where relevant, in accordance with national law, legal acts the purpose of which is to satisfy or collateralise claims by social security authorities.

Text proposed by the Commission

Amendment

(cb) the entering into netting arrangements, including close-out netting, in financial markets, energy markets or other commodity markets as well as legal acts supporting the operation of such arrangements.

Text proposed by the Commission

Amendment

Member States shall ensure that where payments on bills of exchange or cheques are concerned as referred to in the first subparagraph, point (b), the amount paid on the bill or cheque shall be restituted by the last endorser or, if the latter endorsed the bill on account of a third party, by such party if the last endorser or the third party knew or should have known that the debtor was unable to pay its mature debts or that a request for the opening of insolvency proceedings has been submitted at the moment of endorsing the bill or having it endorsed. This knowledge is presumed if the last endorser or the third party was a party closely related to the debtor.

Member States shall ensure that where payments on bills of exchange or cheques are concerned as referred to in the first subparagraph, point (b), the amount paid on the bill or cheque shall be restituted by the last endorser or, if the latter endorsed the bill on account of a third party, by such party if the last endorser or the third party knew that the debtor was unable to pay its mature debts or that a request for the opening of insolvency proceedings has been submitted at the moment of endorsing the bill or having it endorsed. This knowledge is presumed if the last endorser or the third party was a party closely related to the debtor. That presumption shall be rebuttable.

Text proposed by the Commission

Amendment

1. Member States shall ensure that legal acts of the debtor against no or a manifestly inadequate consideration can be declared void where they were perfected within a time period of one year prior to the submission of the request for the opening of insolvency proceedings or after the submission of such request.

1. Member States shall ensure that legal acts of the debtor against no or manifestly inadequate consideration are void, voidable or unenforceable where they were perfected within a time period of one year prior to the submission of the request for the opening of insolvency proceedings or, in the absence of a formal request, prior to the date on which a resolution to commence insolvency proceedings had been made. The payment of a third-party debt in a three-person relationship shall not be automatically considered as a legal act against no or manifestly inadequate consideration.

Member States may provide that the fact that the enrichment resulting from a void legal act is no longer the property of the party which benefited from that legal act can be invoked if that party was not aware of the circumstances on which the avoidance action is based.

Text proposed by the Commission

Amendment

Member States shall ensure that legal acts by which the debtor has intentionally caused a detriment to the general body of creditors can be declared void where both of the following conditions are met:

Member States shall ensure that legal acts by which the debtor has intentionally caused a detriment to the general body of creditors are void, voidable or unenforceable where both of the following conditions are met:

Text proposed by the Commission

Amendment

(a) those acts were perfected either within a time period of four years prior to the submission of the request for the opening of insolvency proceedings or after the submission of such request;

(a) those acts were perfected either within a time period of three years prior to the submission of the request for the opening of insolvency proceedings or, in the absence of a formal request, prior to the date on which a resolution to commence insolvency proceedings had been made;

Text proposed by the Commission

Amendment

(b) the other party to the legal act knew or should have known of the debtor’s intent to cause a detriment to the general body of creditors.

(b) the other party to the legal act knew of the debtor’s intent to cause a detriment to the general body of creditors.

Text proposed by the Commission

Amendment

The knowledge referred to in the first subparagraph, point (b), shall be presumed if the other party to the legal act was a party closely related to the debtor.

The knowledge referred to in the first subparagraph, point (b), shall be presumed if the other party to the legal act was a party closely related to the debtor. That presumption shall be rebuttable.

Text proposed by the Commission

Amendment

2. Where several persons have submitted a request for the opening of insolvency proceedings against the same debtor, the point in time when the first admissible request is submitted shall be considered the beginning of the four-year period referred to in paragraph 1, first subparagraph, point (a).

2. Where several persons have submitted a request for the opening of insolvency proceedings against the same debtor, the point in time when the first admissible request is submitted shall be considered the beginning of the three-year period referred to in paragraph 1, first subparagraph, point (a).

Text proposed by the Commission

Amendment

1. Member State shall ensure that the claims, rights or obligations resulting from legal acts that have been declared void pursuant to Chapter 2 of this Title may not be invoked to obtain satisfaction from the insolvency estate concerned.

1. Member State shall ensure that the claims, rights or obligations resulting from legal acts that are void, voidable or unenforceable pursuant to Chapter 2 of this Title may not be invoked to obtain satisfaction from the insolvency estate concerned.

Text proposed by the Commission

Amendment

Member States shall ensure that the party which benefitted from the legal act that has been declared void is obliged to compensate in full the insolvency estate concerned for the detriment caused to creditors by that legal act.

Member States shall ensure that the party which benefitted from the void, voidable or unenforceable legal act is obliged to compensate in full the insolvency estate concerned for the detriment caused to creditors by that legal act.

Text proposed by the Commission

Amendment

The fact that the enrichment resulting from the legal act that has been declared void is not available anymore in the property of the party which benefited from that legal act (‘lapse of enrichment’) can only be invoked if that party was neither aware, nor should have been aware, of the circumstances on which the avoidance action is based.

The fact that the enrichment resulting from the void, voidable or unenforceable legal act is not available anymore in the property of the party which benefited from that legal act (‘lapse of enrichment’) can only be invoked if that party was not aware of the circumstances on which the avoidance action is based.

Text proposed by the Commission

Amendment

3. Member States shall ensure that the limitation period for all claims resulting from the legal act that can be declared void against the other party is three years from the date of the opening of insolvency proceedings.

3. Member States shall ensure that the limitation period for all claims resulting from the void, voidable or unenforceable legal act against the other party is three years from the date of the opening of insolvency proceedings.

Text proposed by the Commission

Amendment

Consequences for the party which benefitted from the legal act that has been declared void

Consequences for the party which benefitted from the void, voidable or unenforceable legal act

Text proposed by the Commission

Amendment

1. Member States shall ensure that if and to the extent that the party which benefitted from the legal act that has been declared void compensates the insolvency estate for the detriment caused by that legal act, any claim of that party which was satisfied with that legal act revives.

1. Member States shall ensure that if and to the extent that the party which benefitted from the void, voidable or unenforceable legal act compensates the insolvency estate for the detriment caused by that legal act, any claim of that party which was satisfied with that legal act revives.

Text proposed by the Commission

Amendment

Member States shall ensure that any counter-performance of the party which benefitted from the legal act that has been declared void performed after or in an instant exchange for the performance of the debtor under that legal act shall be refunded from the insolvency estate to the extent that the counter-performance is still available in the estate in a form that can be distinguished from the rest of the insolvency estate or the insolvency estate is still enriched by its value.

Member States shall ensure that any counter-performance of the party which benefitted from the void, voidable or unenforceable legal act performed after or in an instant exchange for the performance of the debtor under that legal act shall be refunded from the insolvency estate to the extent that the counter-performance is still available in the estate in a form that can be distinguished from the rest of the insolvency estate or the insolvency estate is still enriched by its value.

Text proposed by the Commission

Amendment

In all cases not covered by the first subparagraph, the party which benefitted from the legal act that has been declared void may file claims for the compensation of the counter-performance. For the purposes of the ranking of claims in insolvency proceedings, this claim shall be deemed to have arisen before the opening of insolvency proceedings

In all cases not covered by the first subparagraph, the party which benefitted from the void, voidable or unenforceable legal act may file claims for the compensation of the counter-performance. For the purposes of the ranking of claims in insolvency proceedings, this claim shall be deemed to have arisen before the opening of insolvency proceedings.

Text proposed by the Commission

Amendment

1. Member States shall ensure that the rights laid down in Article 9 are enforceable against an heir or another universal successor of the party which benefitted from the legal act that has been declared void.

1. Member States shall ensure that Articles 9 and 10 are applicable to an heir or another universal successor of the party which benefitted from the void, voidable or unenforceable legal act.

Text proposed by the Commission

Amendment

Member States shall ensure that the rights laid down in Article 9 are also enforceable against any individual successor of the other party to the legal act that has been declared void if one of the following conditions is fulfilled:

Member States shall ensure that Article 9 is applicable to any individual successor of the other party to the void, voidable or unenforceable legal act if one of the following conditions is fulfilled:

Text proposed by the Commission

Amendment

(b) the successor knew or should have known the circumstances on which the avoidance action is based.

(b) the successor knew the circumstances on which the avoidance action is based.

Text proposed by the Commission

Amendment

The knowledge referred to in the first subparagraph, point (b), shall be presumed if the individual successor is a party closely related to the party which benefitted from the legal act that has been declared void.

The knowledge referred to in the first subparagraph, point (b), shall be presumed if the individual successor is a party closely related to the party which benefitted from the void, voidable or unenforceable legal act. That presumption shall be rebuttable.

Text proposed by the Commission

Amendment

Access to bank account information by designated courts

Access to bank account information by designated courts and administrative authorities

Text proposed by the Commission

Amendment

Designated courts

Designated courts and administrative authorities

Text proposed by the Commission

Amendment

1. Each Member State shall designate, among its courts that are competent to hear cases related to procedures in restructuring, insolvency or discharge of debt, the courts empowered to access and search its national centralised bank account registry established pursuant to Article 32a of Directive (EU) 2015/849 (‘designated courts’).

1. Each Member State shall designate, the courts or administrative authorities that are empowered to access and search bank account registers

Text proposed by the Commission

Amendment

2. Each Member State shall notify the Commission of its designated courts by [6 months from transposition date], and shall notify the Commission of any amendment thereto. The Commission shall publish the notifications in the Official Journal of the European Union.

2. Each Member State shall notify the Commission of its designated courts or administrative authorities by ... [3 months from transposition date], and shall immediately notify the Commission of any amendment thereto. The Commission shall publish the notifications in the Official Journal of the European Union and on the European e-Justice Portal.

Text proposed by the Commission

Amendment

Access to and searches of bank account information by designated courts

Access to and searches of bank account information by designated courts and administrative authorities

Text proposed by the Commission

Amendment

1. Member States shall ensure that, upon request of the insolvency practitioner appointed in ongoing insolvency proceedings, the designated courts have the power to access and search, directly and immediately, bank account information listed in Article 32a(3) of Directive (EU) 2015/849, where necessary for the purposes of identifying and tracing assets belonging to the insolvency estate of the debtor in that proceedings, including those subject to avoidance actions.

1. Member States shall ensure that, upon request of the insolvency practitioner appointed in ongoing insolvency proceedings, including interim proceedings, the designated courts or administrative authorities have the power to access and search, directly and immediately, bank account information, where necessary for the purposes of identifying and tracing assets belonging to the insolvency estate of the debtor in that proceedings, including those subject to avoidance actions.

Text proposed by the Commission

Amendment

2. Member States shall ensure that, upon request of the insolvency practitioner appointed in ongoing insolvency proceedings, the designated courts have the power to access and search, directly and immediately, bank account information in other Member States available through the bank account registers (BAR) single access point set up pursuant to Article XX of Directive (EU) YYYY/XX [OP: the new Anti-Money Laundering Directive] where necessary for the purposes of identifying and tracing assets belonging to the insolvency estate of the debtor in that proceedings, including those subject to avoidance actions.

2. Member States shall ensure that, upon request of the insolvency practitioner appointed in ongoing insolvency proceedings, including interim proceedings, the designated courts or administrative authorities have the power to access and search, directly and immediately, bank account information in other Member States available through the bank account registers interconnection system (BARIS) referred to in Article 16(6) of Directive (EU) 2024/1640, where necessary for the purposes of identifying and tracing assets belonging to the insolvency estate of the debtor in that those proceedings, including those assets subject to avoidance actions.

Text proposed by the Commission

Amendment

3. The additional information that Member States consider essential and include in the centralised bank account registries pursuant to Article 32a(4) of Directive (EU) 2015/849 shall not be accessible and searchable by designated courts.

3. The additional information that Member States consider essential and include in the bank account registers pursuant to Article 16(5) of Directive (EU) 2024/1640 shall not be accessible or searchable by designated courts or administrative authorities.

Text proposed by the Commission

Amendment

3a. Member States shall ensure that the designated courts or administrative authorities or other competent courts or authorities verify whether the conditions referred to in paragraphs 1 and 2 are met. If those conditions are met, Member States shall ensure that the designated courts or administrative authorities transmit the relevant bank account information obtained by accessing and searching bank account information pursuant to paragraphs 1 and 2 to the insolvency practitioner who requested it.

Text proposed by the Commission

Amendment

3b. Access and searches pursuant to paragraphs 1 and 2 shall be without prejudice to national procedural safeguards and Union and national rules on the protection of personal data. Member States shall ensure that bank account information obtained pursuant to paragraphs 1 and 2 is processed only for the purposes for which it was obtained, including where it is processed by insolvency practitioners.

Text proposed by the Commission

Amendment

3c. Member States shall ensure that insolvency practitioners, when processing bank account information obtained pursuant to paragraphs 1 and 2, have in place relevant internal procedures for the appropriate management of confidential information.

Text proposed by the Commission

Amendment

4. For the purpose of paragraphs 1 and 2, access and searches shall be considered to be direct and immediate, inter alia, where the national authorities operating the central bank account registries transmit the bank account information expeditiously by an automated mechanism to the designated courts, provided that no intermediary institution is able to interfere with the requested data or the information to be provided.

4. For the purpose of paragraphs 1 and 2, access to and searches of bank account information shall be considered to be direct and immediate, inter alia, where the national authorities operating the bank account registers transmit the bank account information expeditiously by an automated mechanism to the designated courts or administrative authorities, provided that no intermediary institution is able to interfere with the requested data or the information to be provided.

Text proposed by the Commission

Amendment

Conditions for access and for searches by designated courts

Conditions for access to and for searches of bank account information by designated courts and administrative authorities

Text proposed by the Commission

Amendment

1. Access to and searches of bank account information in accordance with Article 14 shall be performed only on a case-by-case basis by the staff of each designated court that have been specifically appointed and authorised to perform those tasks.

1. Access to and searches of bank account information in accordance with Article 14 shall be performed only on a case-by-case basis by the staff of each designated court or administrative authority that have been specifically appointed and authorised to perform those tasks.

Text proposed by the Commission

Amendment

(a) the staff of the designated courts maintain high professional standards of confidentiality and data protection, and that they are of high integrity and are appropriately skilled;

(a) the staff referred to in paragraph 1 maintain high professional standards of confidentiality and data protection, and that they are of high integrity and are appropriately skilled;

Text proposed by the Commission

Amendment

(b) technical and organisational measures are in place to ensure the security of the data to high technological standards for the purposes of the exercise by designated courts of the power to access and search bank account information in accordance with Article 14.

(b) technical and organisational measures are in place to ensure the security of the data to high technological standards for the purposes of the exercise by designated courts and administrative authorities of the power to access and search bank account information in accordance with Article 14.

Text proposed by the Commission

Amendment

Monitoring access and searches by designated courts

Monitoring access to and searches of bank account information by designated courts and administrative authorities

Text proposed by the Commission

Amendment

(e) the name of the designated court consulting the registry;

(e) the name of the designated court or administrative authority accessing or searching the bank account register;

Text proposed by the Commission

Amendment

(f) the unique user identifier of the staff member of the designated court who made the query or performed the search and, where applicable, of the judge who ordered the query or search and, as far as possible, the unique user identifier of the recipient of the results of the query or search.

(f) the unique user identifier of the staff member of the designated court or administrative authority who made the query and, where applicable, of the judge or the official who ordered the query or search and of the requesting insolvency practitioner.

Text proposed by the Commission

Amendment

2. The authorities operating the centralised bank account registries shall check the logs referred to in paragraph 1 regularly.

2. The authorities operating the bank account registers shall check the logs referred to in paragraph 1 regularly.

Text proposed by the Commission

Amendment

1. Member States shall ensure that insolvency practitioners, when identifying and tracing assets relevant for the insolvency proceedings for which they are appointed, have timely access to the information referred to in Article 30(5), second subparagraph, and in Article 31(4), second subparagraph, of Directive (EU) 2015/849 which is held in the beneficial ownership registers set up in the Member States and is accessible through the system of interconnection of beneficial ownership registers set up in accordance with Article 30(10) and Article 31(9) of Directive (EU) 2015/849.

1. Member States shall ensure that insolvency practitioners, when identifying and tracing assets relevant for the insolvency proceedings for which they are appointed, have timely access to the information on the beneficial owners of legal entities and of legal arrangements held in central beneficial ownership registers, and that such access is provided without alerting the entity, the legal arrangement or the beneficial owner concerned.

Text proposed by the Commission

Amendment

(a) the name, the month, the year of birth, the country of residence and the nationality of the legal owner;

(a) the name, the month, the year of birth, the country of residence and the nationality or nationalities of the beneficial owner;

Text proposed by the Commission

Amendment

(aa) for beneficial owners of legal entities, the nature and extent of the beneficial interest held;

Text proposed by the Commission

Amendment

(ab) for beneficial owners of express trusts or similar legal arrangements, the nature of their beneficial ownership.

Text proposed by the Commission

Amendment

(b) the nature and the extent of the beneficial interest held.

deleted

Text proposed by the Commission

Amendment

3 Access by insolvency practitioners to national asset registers

Access by insolvency practitioners to national registers and databases

Text proposed by the Commission

Amendment

Access by insolvency practitioners to national asset registers

Access by insolvency practitioners to national registers and databases

Text proposed by the Commission

Amendment

1. Member States shall ensure that insolvency practitioners, regardless of the Member State where they have been appointed, have direct and expeditious access to the national asset registers listed in the Annex located in their territory, where available.

1. Member States shall ensure that insolvency practitioners, when identifying and tracing assets relevant for the insolvency proceedings for which they are appointed, regardless of the Member State where they have been appointed, have direct and expeditious access to the national registers and databases listed in the Annex located in their territory, where available.

Text proposed by the Commission

Amendment

2a. Member States shall communicate the lists of the national registers and databases referred to in the Annex to the Commission by…[ 3 months from the date of entry into force of this Directive]. Member States shall immediately notify the Commission of any changes thereto. The Commission shall publish those lists on the European e-Justice portal.

Text proposed by the Commission

Amendment

Chapter 3a

Access to courts by insolvency practitioners of another Member State

Article 18a

Access to courts by insolvency practitioners of another Member State

With respect to the right to initiate proceedings or appear before courts in order to claim assets on behalf of the insolvency estate, each Member State shall ensure that insolvency practitioners appointed in another Member State are not subject to conditions that are less favourable than those applicable to the insolvency practitioners appointed in that Member State.

Text proposed by the Commission

Amendment

1. Member States shall ensure that pre-pack proceedings are composed of the following two consecutive phases:

1. Member States shall introduce pre-pack proceedings for situations in which the debtor is likely to become insolvent in accordance with national law. Member States shall ensure that pre-pack proceedings are composed of the following two consecutive phases:

Text proposed by the Commission

Amendment

2. Pre-pack proceedings shall comply with the conditions set out in this Title. As regards all other matters, including the ranking of claims and the rules on distribution of proceeds, Member States shall apply national provisions on winding-up proceedings, provided that they are compatible with Union law, including the rules laid down in this Title.

2. Pre-pack proceedings shall comply with the conditions set out in this Title. As regards all other matters, including the ranking of claims and the rules on distribution of proceeds, Member States shall apply national provisions on winding-up proceedings, provided that they are compatible with Union law.

Text proposed by the Commission

Amendment

Article 19a

Rights of workers

The pre-pack proceedings are without prejudice to Union and national law on the rights of workers in insolvency proceedings, including the involvement of workers’ representatives and appropriate measures to inform and consult workers’ representatives.

While applying  this Title, Member States shall ensure that the impact on workers is taken into account as much as possible, with a view to preserving employment.

Text proposed by the Commission

Amendment

2. For the purposes of Article 5(1) of Council Directive 2001/23/EC40 , the liquidation phase shall be considered to be bankruptcy or insolvency proceedings instituted with a view to the liquidation of the assets of the transferor under the supervision of a competent public authority.

2. For the purposes of Article 5(1) of Council Directive 2001/23/EC40, the liquidation phase shall be considered to be bankruptcy or insolvency proceedings instituted with a view to the liquidation of the assets of the transferor under the supervision of a competent public authority, provided that the liquidation of the debtor’s business as a going concern satisfies to the greatest extent possible the claims of the creditors.

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40 Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses (OJ L 82, 22.3.2001, p. 16).

40 Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses (OJ L 82, 22.3.2001, p. 16).

Text proposed by the Commission

Amendment

Member States shall provide that, upon request of the debtor, the court appoints a monitor.

Member States shall provide that, upon request of the debtor, the court appoints a monitor. The monitor shall be independent of the debtor, the debtor’s shareholders, the creditors and any other party having a legal or economic interest in the debtor or the debtor’s business.

Text proposed by the Commission

Amendment

(aa) where appropriate, has recourse to an independent valuation in order to comply with requirements related to obtaining market value;

Text proposed by the Commission

Amendment

(b) justifies why it considers that the sale process is competitive, transparent, fair and meets market standards;

(b) formally declares and demonstrates that the sale process is competitive, transparent, fair and meets market standards;

Text proposed by the Commission

Amendment

(d) states whether it considers that the best bid does not constitute a manifest breach of the best-interest-of-creditors test.

(d) formally declares and demonstrates that the best bid does not constitute a manifest breach of the best-interest-of-creditors test.

Text proposed by the Commission

Amendment

Actions by the monitor listed in the first subparagraph shall be done in writing, be made available in digital format and in a timely manner to all parties involved in the preparation phase.

Actions by the monitor listed in the first subparagraph shall be done in writing and shall be made available in digital format and in a timely manner only to the parties involved in the preparation phase. Beyond that, the monitor shall maintain the confidentiality of all information obtained in connection with the preparation phase.

Text proposed by the Commission

Amendment

Member States shall ensure that, in the course of the preparation phase, the debtor remains in control of its assets and the day-to-day operation of the business.

Text proposed by the Commission

Amendment

Member States shall ensure that during the preparation phase, where the debtor is in a situation of likelihood of insolvency or is insolvent in accordance with national law, the debtor can benefit from a stay of individual enforcement actions in accordance with Articles 6 and 7 of Directive (EU) 2019/1023, where it facilitates the seamless and effective roll-out of the pre-pack proceedings. The monitor shall be heard prior to the decision on the stay of individual enforcement actions.

Member States shall ensure that during the preparation phase, where the debtor is likely to become insolvent or is insolvent in accordance with national law, the debtor can benefit from a stay of individual enforcement actions in accordance with Articles 6 and 7 of Directive (EU) 2019/1023, where it is essential for the successful roll-out of the pre-pack proceedings. The monitor and the corresponding creditor shall be heard by the court prior to the decision on the stay of individual enforcement actions.

Text proposed by the Commission

Amendment

2. Where the sale process only produces one binding offer, that offer shall be deemed to reflect the business market price.

2. Without prejudice to Article 32(2), where the sale process only produces one binding offer, that offer shall be deemed to reflect the business market price, unless it can be demonstrated otherwise.

Text proposed by the Commission

Amendment

3. Member States may depart from paragraph 1 only where the court runs a public auction in the liquidation phase in accordance with Article 26. In this case, Article 22(2), point (b) shall not apply.

3. Member States may depart from paragraph 1 only where the court runs a public auction in the liquidation phase in accordance with Article 26(2). In this case, Article 22(2), point (b) shall not apply.

Text proposed by the Commission

Amendment

3a. Member States shall ensure that it is possible, in the course of the preparation phase, to obtain the services of an independent valuation practitioner as a means of gauging a fair market price.

Text proposed by the Commission

Amendment

Member States shall ensure that, when the liquidation phase is opened, the court appoints the monitor referred to in Article 22 as insolvency practitioner.

Member States shall ensure that, when the liquidation phase is opened, the court appoints the monitor referred to in Article 22 as insolvency practitioner unless the monitor resigns or is unable to perform the required functions, such as in cases of serious illness or death.

Text proposed by the Commission

Amendment

2. In case Member States apply Article 24(3), the public auction referred to in that provision shall last no longer than four weeks and shall be initiated within two weeks as of the opening of the liquidation phase. The offer selected by the monitor shall be used as the initial bid in the public auction. Member States shall ensure that the protections granted to the initial bidder in the preparation phase, such as expense reimbursement or break-up fees, are commensurate and proportionate, and do not deter potentially interested parties from bidding in the liquidation phase.

2. By way of derogation from paragraph 1, Member States shall ensure that the court can run a public auction where one or more creditors’ groups demonstrate a credible suspicion of abuse. The offer selected by the monitor shall be used as the initial bid in the public auction. Member States shall ensure that the protections granted to the initial bidder in the preparation phase, such as expense reimbursement or break-up fees, are commensurate and proportionate, and do not deter potentially interested parties from bidding in the liquidation phase.

Text proposed by the Commission

Amendment

By way of derogation from the first subparagraph, Member States may provide that consent of the debtor’s counterparty or counterparties is required in so far as is necessary, depending on the type of contract, the legal status of the parties or the interests of the business.

Text proposed by the Commission

Amendment

2. Member States shall ensure that the court may decide to terminate the executory contracts referred to in paragraph 1, first subparagraph, provided that one of the following conditions applies:

2. Member States shall ensure that the court may decide to terminate the executory contracts referred to in paragraph 1, first subparagraph, subject to a notice period of at least three months prior to the assignment, provided that one of the following conditions applies:

Text proposed by the Commission

Amendment

Point (a) of the first subparagraph shall not apply to executory contracts relating to licenses of intellectual and industrial property rights.

Point (a) of the first subparagraph shall not apply to executory contracts relating to licenses of intellectual and industrial property rights or to credit or financial services contracts.

Text proposed by the Commission

Amendment

Member States shall ensure that the acquirer acquires the debtor’s business or part thereof free of debts and liabilities, unless the acquirer expressly consents to bear the debts and the liabilities of the business or part thereof.

Member States shall ensure that the acquirer acquires the debtor’s business or part thereof free of debts and liabilities, unless the acquirer expressly consents to bear, solely or jointly with the debtor, the debts and the liabilities of the business or part thereof.

Text proposed by the Commission

Amendment

Member States shall ensure that the monitor and the insolvency practitioner are liable for the damages that their failure to comply with their obligations under this Title causes to creditors and third parties affected by the pre-pack proceedings.

Member States shall ensure that the monitor and the insolvency practitioner are liable for the damages that their intentional or negligent failure to comply with their obligations under this Title causes to creditors and third parties affected by the pre-pack proceedings.

Text proposed by the Commission

Amendment

Member States may provide that where it is proved that the disclosure duty referred to in the first subparagraph, point (a), was breached, the court revokes the benefits referred to in Article 28.

Member States shall provide that where it is proved that the disclosure duty referred to in the first subparagraph, point (a), was breached, the court revokes the benefits referred to in Article 28.

Text proposed by the Commission

Amendment

2. Where the offer made by a party closely related to the debtor is the only existing offer, Member States shall introduce additional safeguards for the authorisation and execution of the sale of the debtor’s business or part thereof. These safeguards shall at least include the duty for the monitor and the insolvency practitioner to reject the offer from the party closely related to the debtor if the offer does not satisfy the best-interest-of-creditors test.

2. Where the offer made by a party closely related to the debtor is the only existing offer, Member States shall introduce additional safeguards for the authorisation and execution of the sale of the debtor’s business or part thereof. These safeguards shall at least include the requirement to obtain a market valuation of the business and the duty for the monitor and the insolvency practitioner to reject the offer from the party closely related to the debtor if the offer does not satisfy the best-interest-of-creditors test.

Text proposed by the Commission

Amendment

(a) the monitor or the insolvency practitioner takes the necessary steps to obtain interim financing at the lowest possible cost;

(a) the debtor, the monitor or the insolvency practitioner takes the necessary steps to obtain interim financing at the lowest possible cost;

Text proposed by the Commission

Amendment

-1. Member States shall ensure that, prior to the authorisation of the sale of the debtor’s business or part thereof, the insolvency practitioner provides the court with a report on a favourable best-interest-of-creditors test.

Text proposed by the Commission

Amendment

1.  Member States shall ensure that, where a legal entity becomes insolvent, its directors are obliged to submit a request for the opening of insolvency proceedings with the court no later than 3 months after the directors became aware or can reasonably be expected to have been aware that the legal entity is insolvent.

1.  Member States shall ensure that, where a legal entity becomes insolvent, its directors have the duty to submit a request for the opening of insolvency proceedings with the court no later than 3 months after the directors became aware or can reasonably be expected to have become aware that the legal entity is insolvent in accordance with national law. Preventive restructuring proceedings are be excluded from that obligation.

Text proposed by the Commission

Amendment

1a. By way of derogation from paragraph 1, Member States may provide that the duty referred to therein does not apply to directors who are natural persons and are personally liable for all of the company’s debts where:

(a) the directors inform the public of the company’s insolvency through a notification in a public register, at the latest within the deadline referred to in paragraph 1, in order to ensure that the creditors are able to request the opening of insolvency proceedings; or

(b) the directors take measures that are designed to avoid damage to the creditors of the insolvent company, provided that such measures were reasonably likely to avoid such damage or secure a better outcome for creditors.

Text proposed by the Commission

Amendment

1. Member States shall ensure that the insolvent legal entity’s directors are liable for damages incurred by creditors as a result of their failure to comply with the obligation laid down in Article 36.

1. Member States shall ensure that the insolvent legal entity’s directors are liable for damages incurred by creditors as a result of their failure to comply with the duty laid down in Article 36.

Text proposed by the Commission

Amendment

If Member States have exercised the option provided for in Article 36(1a), they shall ensure that directors who take measures as referred to therein are liable, in accordance with national law, for damage caused to creditors that would not otherwise have been caused had the opening of insolvency proceedings been requested in accordance with Article 36(1).

Text proposed by the Commission

Amendment

Member States may provide that such liability is excluded where and to the extent that the directors can demonstrate, on the basis of objective circumstances, that the measures taken could reasonably be expected to avoid damage to creditors, provided that such measures were reasonably likely to avoid such damage or secure a better outcome for creditors.

Text proposed by the Commission

Amendment

[...]

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Text proposed by the Commission

Amendment

3. Member States may exclude in national law the possibility to establish a creditors’ committee in insolvency proceedings, when the overall costs of the involvement of such a committee are not justified in view of the low economic relevance of the insolvency estate, of the low number of creditors or the circumstance that the debtor is a microenterprise.

3. Member States may exclude in national law the possibility to establish a creditors’ committee in insolvency proceedings, when, due to the nature and scope of the debtor’s business, the overall costs of the involvement of such a committee are not justified in view of the low economic relevance of the insolvency estate, of the low number of creditors or the circumstance that the debtor is a microenterprise.

Text proposed by the Commission

Amendment

1. Member States shall ensure that the members of the creditors’ committee are appointed either at the general meeting of creditors or by decision of the court, within 30 days from the date of the opening of the proceedings as referred to in Article 24(2), point (a) of Regulation (EU) 2015/848.

1. Where a creditors’ committee is established pursuant to Article 58, Member States shall ensure that the members of the creditors’ committee are appointed either at the general meeting of creditors or by decision of the court, within 30 days from the date of the opening of the insolvency proceedings.

Text proposed by the Commission

Amendment

2. Where the members of the creditors’ committee are appointed at the general meeting of creditors, Member States shall ensure that the court certifies the appointment within 5 days from the date of the communication of the appointment to the court.

2. Where the members of the creditors’ committee are appointed at the general meeting of creditors, Member States shall ensure that the court certifies the appointment within 5 working days from the date of the communication of the appointment to the court.

Text proposed by the Commission

Amendment

When workers are among the creditors, Member States shall ensure that the creditors’ committee can include members who are workers or their representatives. Individuals who are not themselves creditors may also be appointed as members of the creditors’ committee only if they represent the interests of a group of creditors.

Text proposed by the Commission

Amendment

Member States shall ensure that members of the creditors’ committee represent solely the interests of the whole body of creditors and act independently of the insolvency practitioner.

Member States shall ensure that members of the creditors’ committee represent solely the interests of the whole body of creditors, in a fair and unbiased way and act independently of the insolvency practitioner.

Text proposed by the Commission

Amendment

By way of derogation from the previous subparagraph, Member States may maintain national provisions that allow to set up more than one creditors’ committee representing different groups of creditors in the same insolvency proceedings. In this case, the members of the creditors’ committee represent solely the interests of the creditors who appointed them.

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Text proposed by the Commission

Amendment

2a. Member States shall ensure that the members of the creditors’ committee act in good faith when carrying out the functions of the committee.

Text proposed by the Commission

Amendment

Article 61

deleted

Number of members

Member States shall ensure that the number of members composing the creditors’ committee is at least 3 and does not exceed 7.

Text proposed by the Commission

Amendment

2. Grounds for removal shall at least include fraudulent or grossly negligent conduct, wilful misconduct, or breach of fiduciary duties with respect to the creditors’ interests.

2. Grounds for removal shall at least include fraudulent or grossly negligent conduct, conflicts of interest, wilful misconduct, or breach of fiduciary duties with respect to the creditors’ interests.

Text proposed by the Commission

Amendment

.

(-a) the scope of the creditors’ committee’s duties;

Text proposed by the Commission

Amendment

Member States shall ensure that the creditors’ committee’s function is to ensure that in the conduct of the insolvency proceedings the creditors’ interests are protected and individual creditors are involved.

Member States shall ensure that the creditors’ committee’s function is to ensure that in the conduct of the insolvency proceedings the interests of the whole body of creditors are protected.

Text proposed by the Commission

Amendment

(e) the duty to provide information to the creditors represented by the creditors’ committee and the right to receive information from those creditors;

(e) the power to share relevant and necessary information to represented creditors and to receive information from them;

Text proposed by the Commission

Amendment

(fa) the power to appoint a secretary;

Text proposed by the Commission

Amendment

Member States shall ensure that creditors, members of the creditors’ committee and any professionals employed by the creditors’ committee maintain the confidentiality of all information obtained in connection with the committee’s activities.

Text proposed by the Commission

Amendment

Members of a creditors’ committee are exempt from individual liability for their actions in their capacity as members of the committee unless they have committed grossly negligent or fraudulent conduct, wilful misconduct, or have breached a fiduciary duty to the creditors they represent.

Members of a creditors’ committee are exempt from individual liability for their actions in their capacity as members of the committee unless they have committed an intentional or grossly negligent violation of duties with respect to the creditors’ interests.

Text proposed by the Commission

Amendment

Expenses for liability insurance covering the liability of members of the creditors’ committee shall be borne by the insolvency estate in accordance with Article 65(2).

Text proposed by the Commission

Amendment

1. Member States shall provide, within the framework of the European e-Justice Portal, a key information factsheet on certain elements of national law on insolvency proceedings.

1. Member States shall provide, within the framework of the European e-Justice Portal, a key information factsheet on essential elements of national law on insolvency proceedings.

Text proposed by the Commission

Amendment

Article 69a

Supporting measures

To address the difficulties of SMEs and microenterprises in particular, and their need for additional supporting measures in the event of insolvency and financial distress, the Commission shall support the exchange of best practices between Member States and provide guidance on that basis and on the basis of exchanges with SME representatives.

Text proposed by the Commission

Amendment

By [5 years after the deadline for transposition of this Directive], the Commission shall present to the European Parliament, the Council and the European Economic and Social Committee a report on the application and impact of this Directive.

By [3 years after the deadline for transposition of this Directive] and every 5 years thereafter, the Commission shall present to the European Parliament, the Council and the European Economic and Social Committee a report on the application, impact and its effectiveness in reaching the objectives of this Directive. The report may be accompanied, if appropriate, by a legislative proposal.

Text proposed by the Commission

Amendment

Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by [2 years from entry into force] at the latest. They shall forthwith communicate to the Commission the text of those provisions.

Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by ... [12 months from entry into force] at the latest. They shall forthwith communicate to the Commission the text of those provisions.

Text proposed by the Commission

Amendment

National asset registers referred to in Article 18

National registers and databases referred to in Article 18

Text proposed by the Commission

Amendment

3. Movable property registers including registers of vehicles, ships and aircrafts and registers of weapons;

3. Movable property registers including registers of vehicles, ships and aircrafts, where property rights are registered in such registers;

Text proposed by the Commission

Amendment

6. Other security registers, including securities depository registers and book-entry registers;

6. Registers or databases containing information on the ownership of securities, such as central securities depositories, as defined in Article 2 of Regulation (EU) No 909/2014;

Text proposed by the Commission

Amendment

9. Probate registers;

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Text proposed by the Commission

Amendment

11. Registers of internet domains;

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Text proposed by the Commission

Amendment

12. Register of General Terms and Conditions.

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Entity and/or person

European Commission

Council of the EU

EDPS Opinion 5/2023 on the Proposal for a Directive harmonising certain aspects of insolvency law

Permanent Representation of the Kingdom of the Netherlands to the European Union

Permanent Representation of Malta to the EU

Permanent Representation of Germany to the EU

Permanent Representation of Bulgaria to the EU

Permanent Representation of the Czech Republic to the EU

Leaseurope AISBLTransparency Register Number: 430010622057-05

European Social Insurance Platform (ESIP)Transparency Register number: 883980785-32

Council of European National Top-Level Domain Registries

German Banking Industry Committee - EU Transparency Register No 52646912360-95

SMEunited EU Transparency Register: identification number 55820581197-35

Nordic Financial Unions

Verband der Automobilindustrie e.V. (VDA)

ISDA - EU Transparency Register, registration number 46643241096-93

Conseil National des Administrateurs et Mandataires Judiciaires

NautaDutilh Law Firm

European Banking Federation - European Transparency Register - ID number 4722660838-23

The European Trade Union Confederation (ETUC)

The Dutch Federation of Pension Funds

Text proposed by the Commission

Amendment

(1) The objective of this Directive is to contribute to the proper functioning of the internal market and remove obstacles to the exercise of fundamental freedoms, such as the free movement of capital and freedom of establishment, which result from differences between national laws and procedures in the area of insolvency.

(1) The objective of this Directive is to contribute to the proper functioning of the internal market and the Capital Markets Union and remove obstacles to the exercise of fundamental freedoms, such as the free movement of capital and freedom of establishment, which result from differences between national laws and procedures in the area of insolvency.

Text proposed by the Commission

Amendment

(2) The wide differences in substantive insolvency laws acknowledged by Regulation (EU) 2015/848 of the European Parliament and of the Council32 create barriers to the internal market by reducing the attractiveness of cross-border investments, thus impacting the cross-border movement of capital within the Union and to and from third countries.

(2) The wide differences in substantive insolvency laws acknowledged by Regulation (EU) 2015/848 of the European Parliament and of the Council32 and the stark divergence in the quality of domestic insolvency proceedings as measured by the World Bank32a create barriers to the internal market by reducing the attractiveness of cross-border investments, thus impacting the viability of economic operation and the cross-border movement of capital within the Union and to and from third countries. It also means that harmonisation of certain aspects of insolvency law may require considerable changes in some Member States.

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32 Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (OJ L 141 5.6.2015, p. 19).

32 Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (OJ L 141 5.6.2015, p. 19).

32a https://subnational.doingbusiness.org/en/data/exploretopics/resolving-insolvency/what-measured

Text proposed by the Commission

Amendment

(3) Insolvency proceedings ensure the orderly winding down or restructuring of companies or entrepreneurs in financial and economic distress. These proceedings are key in financial investments, as they determine the final recovery value of such investments. Diverging rules among Member States have contributed to increasing legal uncertainty and unpredictability about insolvency proceedings’ outcome, so raising barriers especially for cross-border investments in the internal market. Large divergences in recovery value and time required to complete insolvency proceedings across the Union have negative repercussions on cost predictability for creditors and investors in cross-border situations in the internal market.

(3) Insolvency proceedings ensure the orderly winding down or restructuring of companies or entrepreneurs in financial and economic distress. These proceedings are key in financial investments, as they determine the final recovery value of such investments. Diverging rules among Member States have contributed to increasing legal uncertainty and unpredictability about the firms value and insolvency proceedings’ outcome, so raising barriers especially for cross-border investments in the internal market. This uncertainty acts as a disincentive which obstructs the freedom of establishment of undertakings and the willingness to entrepreneurship thus harming the proper functioning of the internal market. Small and medium-sized enterprises, in particular, often lack the necessary resources to assess risks related to cross-border activities. Large divergences in recovery value and time required to complete insolvency proceedings across the Union have negative repercussions on cost predictability for creditors and investors in cross-border situations in the internal market, which acts as a disincentive to investment and makes it more difficult to attract foreign capital into the Union.

Text proposed by the Commission

Amendment

(4) The integration of the internal market in the area of insolvency laws pursued by this Directive is a key tool for a more efficient functioning of the capital markets in the European Union, including greater access to corporate financing. Therefore, it is necessary to set out minimum requirements in targeted areas of national insolvency proceedings, which have a significant impact on the efficiency and length of such proceedings, especially on cross-border insolvency proceedings.

(4) The integration of the internal market in the area of insolvency laws pursued by this Directive is a key tool for a more efficient functioning of the capital markets in the European Union, including greater access to corporate financing, diversification of portfolios and investment opportunities, while also preventing the build-up of non-performing loans (NPL). Therefore, it is necessary to set out minimum requirements in targeted areas of national insolvency proceedings, as well as creating heightened risks and costs for investors, which have a significant impact on the efficiency and length of such proceedings, especially on cross-border insolvency proceedings.

Text proposed by the Commission

Amendment

(4a) The minimum standards laid down in this Directive aim to harmonise Member States’ insolvency law, in particular when it comes to maximisation of legal certainty about a firm’s value, improving efficiency of insolvency proceedings both in terms of costs and length (especially for microenterprises and SMEs), protecting employees and preserving jobs and improving predictability and fair distribution of value amongst creditors. It should be understood that employees, to whom a company ows a debt the moment they deliver their labour, can be regarded as creditors.

Text proposed by the Commission

Amendment

(4b) Harmonisation of insolvency proceedings is associated with lower costs of credit, increased access to credit, improved creditor recovery and more effective protection of workers. At the same time one of the goals when completing the Capital Market Union is to stimulate more equity financing, and figures on how more debt financing through better protection of creditor rights will impact equity financing, are inconclusive. Therefore, a legal instrument to harmonise the legislative solutions for the debt-equity bias, without prejudice to the legitimate and effective use of debt instruments, is necessary in order to place debt and equity financing on an equal footing in the Union in parallel with this Directive.

Text proposed by the Commission

Amendment

(5a) Exceptionally, when the perfection of a legal act requires registration in a public register, e.g. the land register, the legal act may be deemed to be perfected before the registration takes place.

Text proposed by the Commission

Amendment

(8) In the context of avoidance actions, a distinction should be made between legal acts where the claim of the counterparty was due and enforceable and has been satisfied in the owed manner (congruent coverages) and those where performance was not entirely in accordance with the creditor’s claim (incongruent coverage). Incongruent coverages include, in particular, premature payments, the satisfaction with unusual means of payments, the subsequent collateralisation of a so far unsecured claim which was not already agreed upon in the original debt agreement, granting an extraordinary termination right or other amendments not provided for in the underlying contract, the waiver of legal defences or objections or the acknowledgement of disputable debts. In the case of congruent coverages, the avoidance ground of preferences can only be invoked if the creditor of the legal act that can be declared void knew, or should have known, at the time of the transaction that the debtor was insolvent.

(8) In the context of avoidance actions, a distinction should be made between legal acts where the claim of the counterparty was due and enforceable and has been satisfied in the owed manner (congruent coverages) and those where performance was not entirely in accordance with the creditor’s claim (incongruent coverage). Incongruent coverages include, in particular, premature payments, the satisfaction with unusual means of payments, the subsequent collateralisation of a so far unsecured claim which was not already agreed upon in the original debt agreement, granting an extraordinary termination right or other amendments not provided for in the underlying contract, the waiver of legal defences or objections or the acknowledgement of disputable debts. In the case of congruent coverages, the avoidance ground of preferences can only be invoked if the creditor of the legal act that can be declared void knew at the time of the transaction that the debtor was insolvent.

Text proposed by the Commission

Amendment

(25) In order to guarantee that the business is sold at the best market value during the pre-pack proceedings, Member States should either ensure high standards of competitiveness, transparency and fairness of the sale process conducted in the preparation phase, or provide that the court runs a brief public auction after the opening of the liquidation phase of the proceedings.

(25) In order to guarantee that the business is sold at the best market value during the pre-pack proceedings, Member States should either ensure high standards of competitiveness, transparency and fairness of the sale process conducted in the preparation phase, as well as access to independent valuation where required or provide that the court runs a brief public auction after the opening of the liquidation phase of the proceedings.

Text proposed by the Commission

Amendment

(28) The opening of insolvency proceedings should not result in the early termination of contracts under which the parties still have obligations to perform (executory contracts), which are necessary for the continuation of business operations. Such termination would unduly jeopardise the value of the business, or part thereof, to be sold in the pre-pack proceedings. It should, therefore, be ensured that those contracts are assigned to the acquirer of the business of the debtor or part thereof, even without the consent of the counterparty of the debtor to those contracts. Nonetheless, there are situations where the assignment of the executory contracts cannot be reasonably expected, such as when the acquirer is a competitor of the counterparty of the contract. Similarly, the court may come to the conclusion in an individual assessment of an executory contract that its termination would serve the interests of the business of the debtor better than its assignment, such as when the assignment of the contract would result in a disproportionate burden for the business. The court should not be allowed, however, to terminate executory contracts relating to licenses of intellectual and industrial property rights, as they are usually key components of the operations of the business being sold.

(28) The opening of insolvency proceedings should not result in the early termination of contracts under which the parties still have obligations to perform (executory contracts), which are necessary for the continuation of business operations. Such termination would unduly jeopardise the value of the business, or part thereof, to be sold in the pre-pack proceedings. It should, therefore, be ensured that those contracts are assigned to the acquirer of the business of the debtor or part thereof, after consultation of the counterparty of the debtor to those contracts. Nonetheless, there are situations where the assignment of the executory contracts cannot be allowed, such as when the acquirer is a competitor of the counterparty of the contract or when it binds employees to a contract partner they have not chosen. Similarly, the court may come to the conclusion in an individual assessment of an executory contract that its termination would serve the interests of the business of the debtor better than its assignment, such as when the assignment of the contract would result in a disproportionate burden for the business. The court should not be allowed, however, to terminate executory contracts relating to licenses of intellectual and industrial property rights, as they are usually key components of the operations of the business being sold.

Text proposed by the Commission

Amendment

(35) National insolvency rules are not always fit to treat insolvent microenterprises properly and in a proportionate manner. Taking into account the unique characteristics of microenterprises and their specific needs in financial distress, in particular the need for faster, simpler, and affordable procedures should be acknowledged, separate insolvency proceedings should be developed at national level in accordance with the provisions of this Directive. Although the provisions of this Directive concerning simplified winding-up proceedings only apply to microenterprises, it should be possible for Member States to extend their application also to small and medium-sized enterprises that are not microenterprises.

(35) National insolvency rules are not always fit to treat insolvent microenterprises and SMEs properly and in a proportionate manner. Taking into account the unique characteristics of microenterprises and SMEs and their specific needs in financial distress, in particular the need for faster, simpler, and affordable procedures should be acknowledged, separate insolvency proceedings should be developed at national level in accordance with the provisions of this Directive.

Text proposed by the Commission

Amendment

(38) In order to establish cost-effective and expeditious simplified winding-up proceedings for microenterprises, short deadlines should be introduced. Similarly, formalities for all procedural steps, including for the opening of the proceedings, the lodgement and the admission of claims, the establishment of the insolvency estate and the realisation of the assets should be minimised. A standard form should be used for submitting a request to open simplified winding-up proceedings and electronic means should be used for all communications between the competent authority, and where relevant, the insolvency practitioner, and the parties to the proceedings.

(38) In order to establish cost-effective and expeditious simplified winding-up proceedings for microenterprises and SMEs, short deadlines should be introduced. Similarly, formalities for all procedural steps, including for the opening of the proceedings, the lodgement and the admission of claims, the establishment of the insolvency estate and the realisation of the assets should be minimised. A standard form should be used for submitting a request to open simplified winding-up proceedings and electronic means should be used for all communications between the competent authority, and where relevant, the insolvency practitioner, and the parties to the proceedings.

Text proposed by the Commission

Amendment