Judicial Co-Operation in the European Union: Insolvency and Rescue

Abstract

JCOERE – Judicial Co-Operation for Economic Recovery in Europe is a research action project funded by the EU Commission DG Justice. The project has a number of research goals:- The most important part of the project focuses on the obligation imposed on courts in the Recast Regulation 848/2015 to co-operate in insolvency matters. Focussing on restructuring and rescue frameworks, the project is designed to consider obstacles, both substantive and procedural, to co-operation. The project will engage proactively with European judiciary to document their perception of this obligation in practise including possible obstacles and proposed resolutions. The project includes a consideration of guidelines provided to facilitate co-operation. Dissemination of practical information and guidance is a key part of the project.

To compliment this broader context, there is a focus on rescue frameworks in the EU which will deliver the following:-

A study on the history and enactment of the Preventive Restructuring Directive (now passed by the European Parliament and awaiting enactment- COM (2016) 723 FINAL - 2016/0359 (COD)). A comparative study on preventive restructuring frameworks in a number of EU member states benchmarked against the provisions of the Directive. These will include legislative frameworks which pre-existed the Directive such as the Irish Examinership process, the French sauvegarde process, and those which were enacted in anticipation of the Directive including the Netherlands and Spain. The study will range over additional member states including Austria, Germany and will benchmark the UK.

Key issues will include the provision of a stay or moratorium, cram-down provisions regarding approval, treatment of rights in rem and priority for the rescue financier. It is with the obstacles identified in relation to these specific provisions in the directive in mind that the project will then engage with the judiciary to discover how these may be dealt with in their efforts to satisfy the obligation to cooperate with a view to providing guidance and practical information to the European judiciary at large in how such matters could be dealt with in cross-border insolvency cases.

Keywords: judicial cooperation; judicial culture; legal culture; preventive restructuring; corporate rescue; insolvency law; comparative law; Preventive Restructuring Directive; rescue culture

JEL Classification: G3. K4