Creditor Protection and Divisions – Did the CJEU Get it Right?

Abstract

The CJEU’s I.G.I. decision deals with an important aspect of creditor protection in divisions. The Court holds that the actio pauliana under Italian law may be applied to divisions, notwithstanding that such a protective measure is not foreseen in art. 146 and 153 Directive 2017/1132/EU. We argue that the Directive’s ex post protective measures should be understood as fully harmonizing provisions. The decision fails to strike the right balance between the interests of all relevant stakeholders involved, especially between different groups of creditors and that it unduly impairs legal certainty. However, if one takes the decision as a basis, the judgment gives Member States considerable room to introduce or maintain additional safeguards in their national legal systems. We show that national legislators should not give in to this temptation, neither for domestic nor for cross-border divisions.

Keywords: creditor protection, division, actio pauliana, cjeu, european company law