2016/0359(COD) | [ParlTrack]

Proposal for a directive
Recital 26

(26) Requisite majorities should be established by national law to ensure that a minority of affected parties in each class cannot obstruct the adoption of restructuring plan which does not unfairly reduce their rights and interests. Without a majority rule binding dissenting secured creditors, early restructuring would not be possible in many cases, for example where a financial restructuring is needed but the business is otherwise viable. To ensure that parties have a say on the adoption of restructuring plans proportionate to the stakes they have in the business, the required majority should be based on the amount of the creditors' claims or equity holders' interests in any given class. Workers as a class should be exempt from this provision.

Amendment 101 #

Proposal for a directive
Recital 27

(27) The 'best interest of creditors' test makes it possible to ensure that no dissenting creditor is worse off under the restructuring plan than they would be in the case of liquidation, whether that means piecemeal liquidation or sale of the business as a going concern. That test should be applied in any case where a plan needs to be confirmed in order to be binding over dissenting creditors or, as the case may be, dissenting classes of creditors.deleted

Amendment 102 #

Proposal for a directive
Recital 28

(28) While a restructuring plan should always be deemed adopted if the required majority in each affected class supports the plan, a restructuring plan which is not supported by the required majority in each affected class may still be confirmed by a judicial or administrative authority provided that it is supported by at least one affected class of creditors and that dissenting classes are not unfairly prejudiced under the proposed plan (the cross-class cram-down mechanism). In particular, the plan should abide by the absolute priority rule which ensures that a dissenting class of creditors is paid in full before a more junior class can receive any distribution or keep any interest under the restructuring plan. The absolute priority rule serves as a basis for the value to be allocated among the creditors in restructuring. As a corollary to the absolute priority rule, no class of creditors can receive or keep under the restructuring plan economic values or benefits exceeding the full amount of the claims or interests of such class. The absolute priority rule makes it possible to determine, when compared to the capital structure of the enterprise under restructuring, the value allocation that parties are to receive under the restructuring plan on the basis of the value of the enterprise as a going concern.deleted

Amendment 103 #

Proposal for a directive
Recital 28

(28) While a restructuring plan should always be deemed adopted if the required majority in each affected class supports the plan, a restructuring plan which is not supported by the required majority in each affected class may still be confirmed by a judicial or administrative authority provided that it is supported by ~~at least one affected class of credito~~the entrepreneur or the workers and that ~~dissenting classes are not unfairly prejudiced under the proposed plan (the cross-class cram-down mechanism)~~least one affected class of priority creditors. In particular, the plan should abide by the absolute priority rule which ensures that a dissenting class of creditors is paid in full before a more junior class can receive any distribution or keep any interest under the restructuring plan. The absolute priority rule serves as a basis for the value to be allocated among the creditors in restructuring. As a corollary to the absolute priority rule, no class of creditors can receive or keep under the restructuring plan economic values or benefits exceeding the full amount of the claims or interests of such class. The absolute priority rule makes it possible to determine, when compared to the capital structure of the enterprise under restructuring, the value allocation that parties are to receive under the restructuring plan on the basis of the value of the enterprise as a going concern.

Amendment 104 #

Proposal for a directive
Recital 28

Amendment 105 #

Proposal for a directive
Recital 29

(29) While shareholders' or other equity holders' legitimate interests should be protected, Member States should ensure that shareholders cannot unreasonably block the adoption of restructuring plans which would bring the debtor back to viability. For example, the adoption of a restructuring plan should not be conditional on the agreement of the out-of-the-money equity holders, namely equity holders who, upon a valuation of the enterprise, would not receive any payment or other consideration if the normal ranking of liquidation priorities were applied. Member States can deploy different means to achieve this goal, for example by not giving equity holders the right to vote on a restructuring plan. However, where equity holders have the right to vote on a restructuring plan, a judicial or administrative authority should be able to confirm the plan notwithstanding the dissent of one or more classes of equity holders, through a cross-class cram down mechanism. More classes of equity holders may be needed where different classes of shareholdings with different rights exist. Equity holders of small and medium enterprises who are not mere investors but are the owners of the firm and contribute to the firm in other ways such as managerial expertise may not have an incentive to restructure under such conditions. For this reason, the cross-class cram-down mechanism should remain optional for the plan proposer.deleted

Amendment 106 #

Proposal for a directive
Recital 29

(29) While shareholders' or other equity holders' legitimate interests should be protected, Member States should ensure that shareholders cannot unreasonably block the adoption of restructuring plans which would bring the debtor back to viability or enable the viable parts of its business to be continued by another enterprise after its transfer. For example, the adoption of a restructuring plan should not be conditional on the agreement of the out-of-the-money equity holders, namely equity holders who, upon a valuation of the enterprise, would not receive any payment or other consideration if the normal ranking of liquidation priorities were applied. Member States can deploy different means to achieve this goal, for example by not giving equity holders the right to vote on a restructuring plan. However, where equity holders have the right to vote on a restructuring plan, a judicial or administrative authority should be able to confirm the plan notwithstanding the dissent of one or more classes of equity holders, through a cross-class cram down mechanism. More classes of equity holders may be needed where different classes of shareholdings with different rights exist. Equity holders of small and medium enterprises who are not mere investors but are the owners of the firm and contribute to the firm in other ways such as managerial expertise may not have an incentive to restructure under such conditions. For this reason, the cross-class cram-down mechanism should remain optional for the plan proposer.

Amendment 107 #

Proposal for a directive
Recital 30

(30) Confirmation of a restructuring plan by a judicial or administrative authority is necessary to ensure that the reduction of the rights of creditors or interests of equity holders is proportionate to the benefits of the restructuring and that they have access to an effective remedy. The judicial or administrative authority should therefore reject a plan where it has been established that the attempted restructuring reduces the rights of dissenting creditors or equity holders below what they could reasonably expect to receive in the event of the liquidation of the debtor's business, either by piecemeal liquidation or by a sale as a going concern, depending on the particular circumstances of each debtor. However, where the plan is confirmed through a cross-class cram-down mechanism, the absolute priority rule should be applied by reference to the enterprise valuation which, as opposed to the going-concern liquidation valuation of the enterprise, looks at the value of the debtor's business in the longer term. The enterprise valuation is, as a rule, higher than the going-concern liquidation value because it captures the fact that the business continues its activity and contracts with the minimum disruption, has the confidence of financial creditors, shareholders and clients, continues to generate revenues and limits the impact on workers.

Amendment 108 #

Proposal for a directive
Recital 31

(31) The success of a restructuring plan may often depend on whether there are financial resources in place to support first the operation of the business during restructuring negotiations and second the implementation of the restructuring plan after its confirmation. New financing or interim financing should therefore be exempt from avoidance actions which seek to declare such financing void, voidable or unenforceable as an act detrimental to the general body of creditors in the context of subsequent insolvency procedures. National insolvency laws providing for avoidance actions if and when the debtor becomes eventually insolvent or stipulating that new lenders may incur civil, administrative or criminal sanctions for extending credit to debtors in financial difficulties are jeopardising the availability of financing necessary for the successful negotiation and implementation of a restructuring plan. As opposed to new financing which should be confirmed by a judicial or administrative authority as part of a restructuring plan, when interim financing is extended the parties do not know whether the plan will be eventually confirmed or not. ~~Limiting the protection of interim finance to cases where the plan is adopted by creditors or confirmed by a judicial or administrative authority would discourage the provision of interim finance.~~ To avoid potential abuses, only financing that is reasonably and immediately necessary for the continued operation or survival of the debtor's business or the preservation or enhancement of the value of that business pending the confirmation of that plan should be protected. Protection from avoidance actions and protection from personal liability are minimum guarantees granted to interim financing and new financing. However, encouraging new lenders to take the enhanced risk of investing in a viable debtor in financial difficulties may require further incentives such as for example giving such financing priority at least over unsecured claims in subsequent insolvency procedures.

Amendment 109 #

Proposal for a directive
Recital 31

(31) The success of a restructuring plan may often depend on whether there are financial resources in place to support first the operation of the business during restructuring negotiations and second the implementation of the restructuring plan after its confirmation. New financing or interim financing should therefore be exempt from avoidance actions which seek to declare such financing void, voidable or unenforceable as an act detrimental to the general body of creditors in the context of subsequent insolvency procedures, unless these transactions have been offset by the extremely high return granted contractually by the entrepreneur or were carried out fraudulently or dishonestly. That is the case if the period covered by the financing solution was unreasonably short. National insolvency laws providing for avoidance actions if and when the debtor becomes eventually insolvent or stipulating that new lenders may incur civil, administrative or criminal sanctions for extending credit to debtors in financial difficulties are jeopardising the availability of financing necessary for the successful negotiation and implementation of a restructuring plan. As opposed to new financing which should be confirmed by a judicial or administrative authority as part of a restructuring plan, when interim financing is extended the parties do not know whether the plan will be eventually confirmed or not. Limiting the protection of interim finance to cases where the plan is adopted by creditors or confirmed by a judicial or administrative authority would discourage the provision of interim finance. To avoid potential abuses, only financing that is reasonably and immediately necessary for the continued operation or survival of the debtor's business or the preservation or enhancement of the value of that business pending the confirmation of that plan should be protected. Protection from avoidance actions and protection from personal liability are minimum guarantees granted to interim financing and new financing. However, encouraging new lenders to take the enhanced risk of investing in a viable debtor in financial difficulties may require further incentives such as for example giving such financing priority at least over unsecured claims in subsequent insolvency procedures, without, however, giving them priority over the claims of workers or creditors who are suppliers/clients with fewer than 50 employees.

Amendment 110 #

Proposal for a directive
Recital 32

(32) Interested affected parties should have the possibility to appeal a decision on the confirmation of a restructuring plan. However, in order to ensure the effectiveness of the plan, to reduce uncertainty and to avoid unjustifiable delays, appeals should not have suspensive effects on the implementation of a restructuring plan. Where it is established that minority creditors have suffered unjustifiable detriment under the plan, Member States should consider, as an alternative to setting aside the plan, the provision of monetary compensation to the respective dissenting creditors payable by the debtor or the creditors who voted in favour of the plan.

Amendment 111 #

Proposal for a directive
Recital 32

Amendment 112 #

Proposal for a directive
Recital 32

(32) Interested affected parties should have the possibility to appeal a decision on the confirmation of a restructuring plan. However, in order to ensure the effectiveness of the restructuring plan, to reduce uncertainty and to avoid unjustifiable delays, appeals should not have suspensive effects on the implementation of a restructuring plan. Where it is established that minority creditors have suffered unjustifiable detriment under the plan, Member States should consider, as an alternative to setting aside the restructuring plan, the provision of monetary compensation to the respective dissenting creditors payable by the debtor or the creditors who voted in favour of the plan.

Amendment 113 #

Proposal for a directive
Recital 34

(34) Throughout the preventive restructuring procedures, workers should enjoy full labour law protection. I~~n particular,~~f this Directive is without prejudice to workers' rights guaranteed by Council Directive 98/59/EC68, Council Directive 2001/23/EC69, Directive 2002/14/EC of the European Parliament and of the Council70, Directive 2008/94/EC of the European Parliament and of the Council71 and Directive 2009/38/EC of the European Parliament and of the Council72, it shall lay down arrangements for the exercise of these rights which make it possible to safeguard jobs and economic activity, in particular the confidentiality necessary for that purpose, whilst guaranteeing the effective exercise of those rights. The obligations concerning the information and consultation of workers under national law implementing the above-mentioned Directives remain fully intact. This includes obligations to inform and consult workers' representatives on the decision to have recourse to a preventive restructuring framework in accordance with Directive 2002/14/EC. Given the need to ensure an appropriate level of protection of workers, Member States should in principle exempt workers' outstanding claims, as defined in Directive 2008/94/EC, from any stay of enforcement irrespective of the question whether these claims arise before or after the stay is granted. Such a stay should be permissible only for the amounts and for the period that the payment of such claims is effectively guaranteed by other means under national law. Where Member States extend the cover of the guarantee of payment of workers' outstanding claims established by Directive 2008/94/EC to preventive restructuring procedures set up by this Directive, the exemption of workers' claims from the stay of enforcement is no longer justified to the extent covered by that guarantee. Where under national law there are limitations to the liability of guarantee institutions, either in terms of the length of the guarantee or the amount paid to workers, workers should be able to enforce their claims for any shortfall against the employer even during the stay of enforcement period. __________________ 68 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, 12.08.1998, p. 16. 69 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, 22.03.2001, p. 16. 70 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. 71 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. 72 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 purpose of informing and consulting employees, OJ L 122, 16.5.2009, p. 28.

Amendment 114 #

Proposal for a directive
Recital 34

(34) Throughout the preventive restructuring procedures, workers should enjoy full labour law protection. In particular, this Directive is without prejudice to workers' rights guaranteed by Council Directive 98/59/EC68, Council Directive 2001/23/EC69, Directive 2002/14EC of the European Parliament and of the Council70, Directive 2008/94/EC of the European Parliament and of the Council71 and Directive 2009/38/EC of the European Parliament and of the Council72. The obligations concerning the information and consultation of workers under national law implementing the above-mentioned Directives remain fully intact. This includes obligations to inform and consult workers' representatives on the decision to have recourse to a preventive restructuring framework in accordance with Directive 2002/14/EC. Given the need to ensure an appropriate level of protection of workers, Member States should in ~~principle~~ exempt workers' outstanding claims, as defined in Directive 2008/94/EC, from any stay of enforcement irrespective of the question whether these claims arise before or after the stay is granted. Such a stay should be permissible only for the amounts and for the period that the payment of such claims is effectively guaranteed by other means under national law. Where Member States extend the cover of the guarantee of payment of workers' outstanding claims established by Directive 2008/94/EC to preventive restructuring procedures set up by this Directive, the exemption of workers' claims from the stay of enforcement is no longer justified to the extent covered by that guarantee. Where under national law there are limitations to the liability of guarantee institutions, either in terms of the length of the guarantee or the amount paid to workers, workers should be able to enforce their claims for any shortfall against the employer even during the stay of enforcement period. __________________ 68 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, 12.08.1998, p. 16. 69 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, 22.03.2001, p. 16. 70 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. 71 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. 72 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 purpose of informing and consulting employees, OJ L 122, 16.5.2009, p. 28.

Amendment 115 #

Proposal for a directive
Recital 35

(35) Where a restructuring plan entails a transfer of part of undertaking or business, workers' rights arising from a contract of employment or from an employment relationship, notably including the right to wages, should be safeguarded in accordance with Articles 3 and 4 of Directive 2001/23/EC, without prejudice to the specific rules applying in the event of insolvency proceedings under Article 5 of that Directive and in particular the possibilities allowed by Article 5(2) of that Directive. Furthermore, in addition and without prejudice to the rights to information and consultation, including on decisions likely to lead to substantial changes in work organisation or in contractual relations with a view to reaching an agreement on such decisions, which are guaranteed by Directive 2002/14/EC, under this Directive workers who are affected by the restructuring plan should have the right to vote on the plan. For the purposes of voting on the restructuring plan, Member States ~~may decide to~~should place workers in a class separate from other classes of creditors.

Amendment 116 #

Proposal for a directive
Recital 35

(35) Where a restructuring plan entails a transfer of part of undertaking or business, workers' rights arising from a contract of employment or from an employment relationship, notably including the right to wages, should be safeguarded in accordance with Articles 3 and 4 of Directive 2001/23/EC, without prejudice to the specific rules applying in the event of insolvency proceedings under Article 5 of that Directive and in particular the possibilities allowed by Article 5(2) of that Directive. Furthermore, in addition and without prejudice to the rights to information and consultation, including on decisions likely to lead to substantial changes in work organisation or in contractual relations with a view to reaching an agreement on such decisions, which are guaranteed by Directive 2002/14/EC, under this Directive workers who are affected by the restructuring plan should have the right to vote on the plan. For the purposes of voting on the restructuring plan, Member States ~~may decide to~~shall place workers in a class separate from other classes of creditors.

Amendment 117 #

Proposal for a directive
Recital 35

(35) Where a restructuring plan entails a transfer of part of undertaking or business, workers' rights arising from a contract of employment or from an employment relationship, notably including the right to wages, should be safeguarded in accordance with Articles 3 and 4 of Directive 2001/23/EC, without prejudice to the specific rules applying in the event of insolvency proceedings under Article 5 of that Directive and in particular the possibilities allowed by Article 5(2) of that Directive. Furthermore, in addition and without prejudice to the rights to information and consultation, including on decisions likely to lead to substantial changes in work organisation or in contractual relations with a view to reaching an agreement on such decisions, which are guaranteed by Directive 2002/14/EC, under this Directive workers who are affected by the restructuring plan should have the right to vote on the plan. For the purposes of voting on the restructuring plan, Member States may decide to place workers in a class separate from other classes of creditors. Due account should be taken of the rulings handed down by the Court of Justice, as Advocate-General Mengozzi recently pointed out in his conclusions in Case C- 126/16.

Amendment 118 #

Proposal for a directive
Recital 35 a (new)

(35a) Any proposed restructuring operation should be fully explained to workers' representatives who should be given such information about the proposed restructuring as to enable them to undertake an in-depth assessment and to prepare for consultations, where appropriate1 a. __________________ 1a(P7_TA(2013)0005 Information and consultation of workers, anticipation and management of restructuring)

Amendment 119 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 36

(36) To further promote preventive restructurings, it is important to ensure that directors are not dissuaded from exercising reasonable business judgment or taking reasonable commercial risks, particularly where to do so would improve the chances for the restructuring of potentially viable businesses. Where the enterprise experiences financial difficulties, directors should take such steps as seeking professional advice, including on restructuring and insolvency, for instance by making use of early warning tools where applicable; protecting the assets of the company so as to maximize value and avoid loss of key assets; considering the structure and functions of the business to examine viability and reduce expenditure; not committing the company to the types of transaction that might be subject to avoidance unless there is an appropriate business justification; continuing to trade in circumstances where it is appropriate to do so to maximize going concern value; holding negotiations with creditors and entering preventive restructuring procedures. Where the debtor is in the vicinity of insolvency, it is also important to protect the legitimate interests of ~~creditors~~the entrepreneur from management decisions that may have an impact on the constitution of the debtor’s estate, in particular where those decisions may have the effect of further diminishing the value of the estate available for restructuring efforts or for distribution to creditors. It is therefore necessary that in such circumstances directors avoid any deliberate or grossly negligent actions that result in personal gain at the expense of stakeholders, agreeing to transactions at under value, or taking actions leading to unfair preference of one or more stakeholders over others. Directors for the purposes of this Directive should be persons responsible for taking decisions concerning the management of the company. Member States may make provision for the recovery of excessive bonuses paid to directors during the period covered by the stay or restructuring plan. These sums may be distributed to the debtors.

Amendment 120 #

Proposal for a directive
Recital 37

(37) The different second chance possibilities in the Member States, or in some cases the lack of such possibilities, may incentivise over-indebted entrepreneurs to relocate to Member States in order to benefit from shorter discharge periods or more attractive conditions for discharge, leading to additional legal uncertainty and costs for the creditors when recovering their claims. Furthermore, the effects of bankruptcy, in particular the social stigma, legal consequences such as disqualifying entrepreneurs from taking up and pursuing entrepreneurial activity, and the on-going inability to pay off debts constitute important disincentives for entrepreneurs seeking to set up a business or have a second chance, even if evidence shows that entrepreneurs who have gone bankrupt have more chance to be successful the second timelong with eviction proceedings or lack of access to basic supplies necessary for decent subsistence resulting from cases of over-indebtedness involving consumers who are not entrepreneurs, together with the on-going inability to pay off debts constitute important disincentives for entrepreneurs seeking to set up a business or consumers wishing to avoid the marginalisation and exclusion that being forced to resort to the undeclared, irregular or black economy would entail and have a second chance, even if evidence shows that entrepreneurs who have gone bankrupt have more chance to be successful the second time and that consumers freed of their debts are more likely to make regular and legal contributions to tax and social security systems and avoid being exposed to exploitation and precarious conditions. Steps should therefore be taken to reduce the negative effects of over-indebtedness and bankruptcy on entrepreneurs, in particular by allowing for a full discharge of debts after a certain period of time and by limiting the length of disqualification orders issued in connection with the debtor's over-indebtedness.

Amendment 121 #

Proposal for a directive
Recital 37

(37) The different second chance possibilities in the Member States may incentivise over-indebted entrepreneurs to relocate to Member States in order to benefit from shorter discharge periods or more attractive conditions for discharge, leading to additional legal uncertainty and costs for the creditors when recovering their claims. Furthermore, the effects of bankruptcy, in particular the social stigma, legal consequences such as disqualifying entrepreneurs from taking up and pursuing entrepreneurial activity and the on-going inability to pay off debts constitute important disincentives for entrepreneurs seeking to set up a business or have a second chance, even if evidence shows that entrepreneurs who have gone bankrupt have more chance to be successful the second time. Steps should therefore be taken to reduce the negative effects of over-indebtedness and bankruptcy on entrepreneurs, in particular by allowing for a full discharge of debts after a certain period of time, by establishing a liability regime which both incentivises early and responsible action and punishes the failure to take such action, and by limiting the length of disqualification orders issued in connection with the debtor's over- indebtedness.

Amendment 122 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 38

(38) A full discharge or the end of disqualification after a short period of time are not appropriate in all circumstances, for instance in cases where the debtor is dishonest or has acted in bad faith. Member States should provide clear guidance and criteria to judicial or administrative authorities on ~~how to~~the method for assessing the honesty of the entrepreneur. For example, in establishing whether the debtor was dishonest, judicial or administrative authorities may take into account circumstances such as the nature and extent of the debts, the time when these were incurred, the efforts of the debtor to meet the debts and comply with legal obligations including public licensing requirements and proper bookkeeping, and actions on his or her part to frustrate recourse by creditors. Disqualification orders may last longer or indefinitely in situations where the entrepreneur exercises certain professions which are considered sensitive in the Member States or where he or she was convicted for criminal activities. In such cases it would be possible for entrepreneurs to benefit from a discharge of debt, but still be disqualified for a longer period of time or indefinitely from exercising a particular profession.

Amendment 123 #

Proposal for a directive
Recital 38

(38) A full discharge or the end of disqualification after a short period of time are not appropriate in all circumstances, for instance in cases where the debtor is dishonest or has acted in bad faith. Member States should provide clear guidance to judicial or administrative authorities on how to assess the honesty of the entrepreneur or consumer. For example, in establishing whether the debtor was dishonest, judicial or administrative authorities may take into account circumstances such as the nature and extent of the debts, the time when these were incurred, the efforts of the debtor to meet the debts and comply with legal obligations including public licensing requirements and proper bookkeeping, and actions on his or her part to frustrate recourse by creditors. Disqualification orders may last longer or indefinitely in situations where the entrepreneur exercises certain professions which are considered sensitive in the Member States or where he or she was convicted for criminal activities. In such cases it would be possible for entrepreneurs to benefit from a discharge of debt, but still be disqualified for a longer period of time or indefinitely from exercising a particular profession.

Amendment 124 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 39

(39) It is necessary to maintain and enhance the transparency and predictability of the procedures in delivering outcomes that are favourable for the preservation of businesses and for ~~giving entrepreneurs a second chance or that permit the efficient liquidation of non-viable enterprises~~maintaining decent living conditions for citizens, and for giving entrepreneurs and consumers who are not entrepreneurs a second chance. It is also necessary to reduce the excessive length of insolvency procedures in many Member States, which results in legal uncertainty for creditors and investors and low recovery rates, along with serious problems of poverty and the risk of social and labour exclusion. Finally, given the enhanced cooperation mechanisms between courts and practitioners in cross- border cases set up by Regulation (EU) 2015/848, the professionalism of all actors involved needs to be brought to comparable high levels across the Union. To achieve these objectives, Member States should ensure that members of the judicial and administrative bodies are properly trained and have specialised knowledge and experience in insolvency matters in the case of both entrepreneurs and consumers who are not entrepreneurs. Such specialisation of members of the judiciary should allow making decisions with potentially significant economic and social impacts within a short period of time and should not mean that members of the judiciary have to deal exclusively with restructuring, insolvency and second chance matters. For example, the creation of specialised courts or chambers in accordance with national law governing the organisation of the judicial system could be an efficient way of achieving these objectives.

Amendment 125 #

Proposal for a directive
Recital 39

(39) It is necessary to maintain and enhance the transparency and predictability of the procedures in delivering outcomes that are favourable for the preservation of businesses and for giving entrepreneurs a second chance or that permit the efficient liquidation of non-viable enterprises. It is also necessary to reduce the excessive length of insolvency procedures in many Member States, which results in legal uncertainty for creditors and investors and low recovery rates. Finally, given the enhanced cooperation mechanisms between courts and practitioners in cross- border cases set up by Regulation (EU) 2015/848, the professionalism of all actors involved needs to be brought to comparable high levels across the Union. To achieve these objectives, Member States should ensure that members of the judicial and administrative bodies are properly trained and have specialised knowledge and experience in insolvency matters. Such specialisation of members of the judiciary should allow making decisions with potentially significant economic and social impacts within a short period of time and should not mean that members of the judiciary have to deal exclusively with restructuring, insolvency and second chance matters. For example, the creation of ~~specialised~~ courts or chambers with specialist magistrates in accordance with national law governing the organisation of the judicial system could be an efficient way of achieving these objectives.

Amendment 126 #

Proposal for a directive
Recital 39

(39) It is necessary to maintain and enhance the transparency and predictability of the procedures in delivering outcomes that are favourable for the preservation of businesses and for giving entrepreneurs a second chance or that permit the efficient liquidation of non-viable enterprises. It is also necessary to reduce the excessive length of insolvency procedures in many Member States, which results in legal uncertainty for creditors and investors and low recovery rates. That reduction may in particular be secured by introducing, as a first step, confidential procedures which make it possible, in part by virtue of that confidentiality, to prepare the plan or the assignment without the loss of value which would occur if that intention were to be made public. Finally, given the enhanced cooperation mechanisms between courts and practitioners in cross- border cases set up by Regulation (EU) 2015/848 and applicable to public procedures, the professionalism of all actors involved needs to be brought to comparable high levels across the Union. To achieve these objectives, Member States should ensure that members of the judicial and administrative bodies are properly trained and have specialised knowledge and experience in insolvency matters. Such specialisation of members of the judiciary should allow making decisions with potentially significant economic and social impacts within a short period of time and should not mean that members of the judiciary have to deal exclusively with restructuring, insolvency and second chance matters. For example, the creation of specialised courts or chambers in accordance with national law governing the organisation of the judicial system could be an efficient way of achieving these objectives.

Amendment 127 #

Proposal for a directive
Recital 39

(39) It is necessary to maintain and enhance the transparency and predictability of the procedures in delivering outcomes that are favourable for the preservation of businesses and for giving entrepreneurs a second chance or that permit the efficient liquidation of non-viable enterprises. To this end, the Commission is urged to consider creating a single European point of contact for the sale of assets of non- viable enterprises. This would avoid fragmentation of sales and enhance the value of company assets, as well as increasing the recovery rate for creditors, including employees. It is also necessary to reduce the excessive length of insolvency procedures in many Member States, which results in legal uncertainty for creditors and investors and low recovery rates. Finally, given the enhanced cooperation mechanisms between courts and practitioners in cross- border cases set up by Regulation (EU) 2015/848, the professionalism of all actors involved needs to be brought to comparable high levels across the Union. To achieve these objectives, Member States should ensure that members of the judicial and administrative bodies are properly trained and have specialised knowledge and experience in insolvency matters. Such specialisation of members of the judiciary should allow making decisions with potentially significant economic and social impacts within a short period of time and should not mean that members of the judiciary have to deal exclusively with restructuring, insolvency and second chance matters. For example, the creation of specialised courts or chambers in accordance with national law governing the organisation of the judicial system could be an efficient way of achieving these objectives.

Amendment 128 #

Proposal for a directive
Recital 40

(40) Member States should also ensure that the practitioners in the field of restructuring, insolvency and second chance which are appointed by judicial or administrative authorities are properly trained and supervised in the carrying out of their tasks, that they are appointed in a transparent manner with due regard to the need to ensure efficient procedures and that they perform their tasks with integrity~~. Practitioners should also~~ bearing in mind the objective of restoring the viability of the company. Practitioners should be rescuers not liquidators and they should adhere to ~~voluntary~~a codes of conduct aiming at ensuring an appropriate level of qualification and training, transparency of the duties of such practitioners and the rules for determining their remuneration, the taking up of professional indemnity insurance cover and the establishment of oversight and regulatory mechanisms which should include an appropriate and effective regime for sanctioning those who have failed in their duties. Such standards may be attained without the need in principle to create new professions or qualifications.

Amendment 129 #

Proposal for a directive
Recital 41

(41) To increase their chances of success and further reduce the length of procedures and at the same time ensure a better participation of creditors in restructuring, insolvency and discharge procedures and to ensure similar conditions for creditors irrespective of where they are located in the Union, Member States should put in place distance means of communication in court procedures. Therefore, it should be possible that procedural steps such as the filing of claims by creditors, the notifications sent by the debtor or by practitioners in the field of restructuring, insolvency and second chance, voting on a restructuring plan or lodging appeals take place electronically. The cross-border recognition of such communications should comply with Regulation (EU) No 910/2014 of the European Parliament and of the Council73. __________________ 73 Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC (OJ L 257, 28.8.2014, p. 73).

Amendment 130 #

Proposal for a directive
Recital 42

(42) It is important to gather reliable data on the performance of restructuring, insolvency and discharge procedures in order to monitor the implementation and application of this Directive. Therefore Member States should collect and aggregate data that is sufficiently granular to enable an accurate assessment of how the Directive works in practice. Particular emphasis should be put on the collection of data, in which there are currently significant differences, such as data on the length of insolvency procedures and data on creditors’ recovery rates, whether such data is secured or not.

Amendment 131 #

Proposal for a directive
Recital 46 a (new)

(46a) Under no circumstances should workers bear the burden of restructuring, insolvency and discharge procedures, and the debts owing to them (such as unpaid wages) should always be recovered in full and without delay. In order to guarantee the continuity of production and employment and to better fight tactical or fraudulent practices by management, workers should also be informed and consulted at the initial stage of restructuring, insolvency and discharge procedures.

Amendment 132 #

Proposal for a directive
Recital 47

(47) Since the objectives of this Directive cannot be sufficiently achieved by the Member States acting alone because differences between national restructuring and insolvency frameworks would continue to raise obstacles to the free movement of capital and the freedom of establishment, but can rather be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives,deleted

Amendment 133 #

Proposal for a directive
Article 1 – paragraph 1 – point a

(a) preventive restructuring procedures available for debtors in financial difficulty, including when there is a likelihood of insolvency;

Amendment 134 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 1 – paragraph 1 – point a

(a) preventive restructuring procedures available for debtors in financial difficulty when there is a likelihood of insolvency or where the procedures are being used to resolve a short-term problem, to reduce the amount owed to all or some of the creditors or to transfer all or part of the viable business to another enterprise on the basis of arrangements which afford creditors a dividend at least as large as that which they would have received in the event of liquidation;

Amendment 135 #

Proposal for a directive
Article 1 – paragraph 1 – point b

(b) procedures leading to a discharge of debts incurred by honest over-indebted entrepreneurs or natural persons who are not entrepreneurs (consumers who are not entrepreneurs) and allowing them to take up a new activity or to maintain decent living conditions;

Amendment 136 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 1 – paragraph 2 – point g

~~(g) natural persons who are not entrepreneurs.~~deleted

Amendment 137 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 1 – paragraph 3

3. Member States ~~may extend the application of the procedures referred to in point (b) of paragraph 1~~shall, in accordance with point (b) of paragraph 1, apply the procedures provided for to over indebted natural persons who are not entrepreneurs.

Amendment 138 #

Proposal for a directive
Article 2 – paragraph 1 – point 1

(1) 'insolvency procedure' means a collective insolvency procedure opened by means of a public decision which entails a partial or total divestment of the debtor and the appointment of a liquidator;

Amendment 139 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 2 – paragraph 1 – point 2

(2) 'restructuring' means a procedure or measures, whether public or confidential, which make it possible to cha~~ngi~~nge the composition, conditions, or structure of a debtor's assets and liabilities or any other part of the debtor's capital structure, including share capital, or a combination of those elements, including sales of assets or all or parts of the business, with the objective of enabling the enterprise to continue in whole or in part;

Amendment 140 #

Proposal for a directive
Article 2 – paragraph 1 – point 2

(2) 'restructuring' means changing the composition, conditions, or structure of a debtor's assets and liabilities or any other part of the debtor's capital structure, including share capital, individual property or a combination of those elements, including sales of assets or parts of the business or of the natural person’s property, with the objective of enabling the enterprise or consumer affected by debt to continue in whole or in part or to maintain decent conditions for their subsistence;

Amendment 141 #

Proposal for a directive
Article 2 – paragraph 1 – point 4

~~4. ‘stay of individual enforcement actions' means a temporary suspension of the right to enforce a claim by a creditor against a debtor, ordered by a judicial or administrative authority;~~deleted

Amendment 142 #

Proposal for a directive
Article 2 – paragraph 1 – point 6

(6) 'class formation' means the grouping of affected creditors and equity holders in a restructuring plan in such a way as to reflect the rights and seniority of the affected claims and interests, taking into account possible pre-existing entitlements, liens or inter-creditor agreements, and their treatment under the restructuring plan;. Workers shall be a class of preferential creditors. In order to prevent chain bankruptcies, suppliers/clients with fewer than 50 employees shall be treated as a preferential class of creditors when activities essential to their survival are at stake. A creditor who is a dominant bank or dominant client whose deliberate actions have been shown to have given rise to the probability of insolvency shall be placed by the Member State in a separate, less preferential class.

Amendment 143 #

Proposal for a directive
Article 2 – paragraph 1 – point 6

Amendment 144 #

Proposal for a directive
Article 2 – paragraph 1 – point 7

7. ‘cram-down of dissenting creditors' means the confirmation by a judicial or administrative authority of a restructuring plan that has the support of a majority in value of creditors or a majority in value in each and every class of creditors over the dissent of a minority of creditors or the dissent of a minority of creditors within each class;deleted

Amendment 145 #

Proposal for a directive
Article 2 – paragraph 1 – point 7

(7) '‘cram-down of dissenting creditors' means the confirmation by a judicial or administrative authority of a restructuring plan that has the support of a majority in value of creditors or a majority in value in each and every class of creditors, or whose transfer price is not enough to pay all the creditors in full, over the dissent of a minority of creditors or the dissent of a minority of creditors within each class or the dissent of the creditors who do not receive full payment of their claims;

Amendment 146 #

Proposal for a directive
Article 2 – paragraph 1 – point 8

~~8. ‘a cross-class cram-down' means the confirmation by a judicial or administrative authority of a restructuring plan over the dissent of one or several affected classes of creditors;~~deleted

Amendment 147 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 2 – paragraph 1 – point 12

(12) 'interim financing' means any funds, whether provided by an existing or new creditor, that is reasonably and immediately necessary for the debtor's business to continue operating or to survive, or to preserve or enhance the value of that business pending the confirmation of a restructuring plan;Does not affect the English version.)

Amendment 148 #

Proposal for a directive
Article 2 – paragraph 1 – point 13 a (new)

(13a) ‘over-indebted non-business consumer’ means a natural person not exercising a trade, business, craft or profession comparable to the activities of an employer, who, as a consumer or user of goods or public or private services, is temporarily or permanently unable to pay debts as they fall due;

Amendment 149 #

Proposal for a directive
Article 2 – paragraph 1 – subparagraph 15 – point a

(a) to assist the debtor, the workers or the creditors in drafting or negotiating a restructuring plan;

Amendment 150 #

Proposal for a directive
Article 2 – paragraph 1 – point 15 – point a

(a) to assist the debtor or the creditors in drafting or negotiating a viable restructuring or business wind-up plan;

Amendment 151 #

Proposal for a directive
Article 2 – paragraph 1 – point 15 – point b

(b) to supervise the activity of the debtor during the negotiations on a restructuring or business wind-up plan and report to a judicial or administrative authority;

Amendment 152 #

Proposal for a directive
Article 3 – paragraph 1

1. Member States shall ensure that ~~debtors and~~ entrepreneurs have access to early warning tools which can detect a deteriorating business development and signal to the ~~debtor or the~~ entrepreneur the need to act as a matter of urgency.

Amendment 153 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 3 – paragraph 1

1. Member States shall ensure that debtors ~~and~~, entrepreneurs as well as workers and their representatives have access to early warning tools which can detect a deteriorating business development and signal to the debtor or the entrepreneur the need to act as a matter of urgency.

Amendment 154 #

Proposal for a directive
Article 3 – paragraph 1

1. Member States shall ensure that debtors and entrepreneurs have access to early warning tools which can detect a deteriorating business development or worsening consumer indebtedness and signal to the debtor or the entrepreneur the need to act as a matter of urgency.

Amendment 155 #

Proposal for a directive
Article 3 – paragraph 2

2. Member States shall ensure that debtors ~~and~~, entrepreneurs as well as workers and their representatives have access to relevant up-to-date, clear, concise and user- friendly information about the availability of early warning tools and any means available to them to restructure at an early stage or to obtain a discharge of personal debt.

Amendment 156 #

Proposal for a directive
Article 3 – paragraph 2

2. Member States shall ensure that ~~debtors and~~ entrepreneurs have access to relevant up- to-date, clear, concise and user- friendly information about the availability of early warning tools and any means available to them to restructure at an early stage or to obtain a discharge of personal debt.

Amendment 157 #

Proposal for a directive
Article 3 – paragraph 2 a (new)

2a. Member States shall ensure that employees’ representatives have full access to information and are consulted if action needs to be taken;

Amendment 158 #

Proposal for a directive
Article 3 – paragraph 3

3. Member States ~~may limit the access provided for in paragraphs 1 and 2 to small and medium sized enterprises or to entrepreneurs~~shall ensure that workers’ representatives are in a position to warn entrepreneurs about matters giving cause for concern regarding the undertaking and the urgent need for action in this regard.

Amendment 159 #

Proposal for a directive
Article 3 – paragraph 3 a (new)

3a. Member States shall ensure that workers’ representatives are in a position to have recourse to an independent expert, funded by the undertaking or the State as they see fit, giving them access to relevant, up-to-date, clear, concise and user- friendly information regarding the situation of the undertaking. Member States are able limit the access provided for in paragraph 3a to enterprises with over 150 employees.

Amendment 160 #

Edouard MARTIN, Jutta STEINRUCK, Agnes JONGERIUS, Sergio GUTIÉRREZ PRIETO, Javi LÓPEZ, Elena GENTILE, Maria ARENA

Proposal for a directive
Article 3 – paragraph 3 a (new)

3a. Member States shall ensure that workers’ representatives are in a position to have recourse to an expert funded by the undertaking, giving access to relevant, up-to-date, clear, concise and user- friendly information regarding the situation of the business and the different restructuring policies being envisaged, including transfer to worker ownership;

Amendment 161 #

Proposal for a directive
Article 3 – paragraph 3 a (new)

3a. Member States shall ensure that the tax, social security, competition and audit authorities are sufficient means under national law be able to flag any worrying developments as soon as possible;

Amendment 162 #

Proposal for a directive
Article 4 – paragraph 1

Amendment 163 #

Proposal for a directive
Article 4 – paragraph 2

2. Preventive restructuring frameworks may consist of one or more procedures or measures, duly negotiated and consulted with workers’ representatives, who shall retain all rights of collective bargaining and industrial action. It shall also provide for procedures or measures destined to the recovery of the indebted firm by workers, according to the relevant national law.

Amendment 164 #

Proposal for a directive
Article 4 – paragraph 3

3. Member States ~~shall~~may put in place provisions limiting the involvement of a judicial or administrative authority to where it is necessary and proportionate so, while ensuring that rights of any affected parties are safeguarded.

Amendment 165 #

Proposal for a directive
Article 4 – paragraph 4

4. Preventive restructuring frameworks shall be available on the application by debtors, or by creditors with the agreement of debtors or at the request of management with the agreement of the entrepreneurs.

Amendment 166 #

Edouard MARTIN, Jutta STEINRUCK, Agnes JONGERIUS, Javi LÓPEZ, Elena GENTILE, Sergio GUTIÉRREZ PRIETO

Proposal for a directive
Article 4 – paragraph 4

4. Preventive restructuring frameworks shall be available on the application by debtors, ~~or by~~by workers or by other creditors with the agreement of debtors.

Amendment 167 #

Proposal for a directive
Article 4 – paragraph 4 a (new)

4a. Member States shall introduce specific provisions placing workers in a position, prior to restructuring, to consider the possibility of a cooperative buyout, a process that would include entering into negotiations with creditors, administrators, experts, financial institutions, trade unions and the authorities concerned, so as to create every opportunity for a viable and sustainable takeover that would not simply be considered as a last resort. Member States shall ensure that the necessary legal provisions are in place for worker buyouts and the creation of cooperatives in this and other instances. Public financing should be secured, through the cohesion funds for example, to assist projects ahead of restructuring, as well as mechanisms for the direct funding of cooperative worker buyouts.

Amendment 168 #

Proposal for a directive
Article 4 – paragraph 4 a (new)

4a. The businesses shall be required to inform and consult their employees before and during negotiations. Utmost attention should be paid to worker interests, especially during the various stages of early restructuring and, where insolvency proceedings are under way, to make explicit reference to Article 5(2) of Directive 2001/23/EC, with a view to protecting the rights of employees in this instance.

Amendment 169 #

Proposal for a directive
Article 4 – paragraph 4 b (new)

4b. Member States shall take the necessary measures to ensure that dishonest entrepreneurs guilty of deliberate insolvency are not able to benefit from the provisions of this Directive and keep a blacklist of dishonest entrepreneurs not entitled to do so. The Member States shall determine the justification for, and duration of, inclusion on the list.

Amendment 170 #

Proposal for a directive
Article 4 – paragraph 4 c (new)

4c. The Member States shall lay down presumption of honesty criteria in respect of entrepreneurs requesting it.

Amendment 171 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 4 a (new)

Article 4a Entrepreneurs seeking preventive restructuring framework arrangements must make immediately available to their interlocutors (workers, trade unions and creditors generally, as well as designated crisis settlement bodies) all their accounts (financial statements and annexes, banking and insurance documents, stock records, etc.) and agree to any form of verification of their activities.

Amendment 172 #

Proposal for a directive
Article 5 – paragraph 1

1. Member States shall ensure that debtors accessing preventive restructuring procedures remain totally or at least partially in control of their assets and the day-to-day operation of the business. or, where applicable, non-business consumers may keep all or, at least, part of their income or assets in order that they and their immediate families may maintain decent living conditions.

Amendment 173 #

Proposal for a directive
Article 5 – paragraph 3 – introductory part

3. Member States ~~may requi~~shall ensure the appointment of a practitioner at least in the field of restructuring in the following cases:

Amendment 174 #

Proposal for a directive
Article 5 – paragraph 3 – point b a (new)

(ba) where the plan provides for the transfer of all or part of an undertaking to another undertaking without keeping on the entire workforce.

Amendment 175 #

Proposal for a directive
Article 5 – paragraph 3 – point b a (new)

(ba) where the restructuring plan cuts more than 30 % of the workforce, or more than 20 % where the business has 50 employees;

Amendment 176 #

Proposal for a directive
Article 5 – paragraph 3 a (new)

3a. Member States shall ensure that a creditors' committee is established. The committee shall include representatives of the main creditors and other stakeholders, including workers. The members of the creditors' committee shall support and monitor the insolvency administrator's execution of his office. They shall demand information on the progress of business affairs, have the books and business documents inspected and the monetary transactions and the available cash verified.

Amendment 177 #

Proposal for a directive
Article 6

~~[...]~~deleted

Amendment 178 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 6 – paragraph 1

1. Member States shall ensure that honest debtors who are negotiating a restructuring plan with their creditors may benefit from a stay of individual enforcement actions if and to the extent such a stay is necessary to support the negotiations of a restructuring plan.

Amendment 179 #

Proposal for a directive
Article 6 – paragraph 1

1. Member States shall ensure that debtors who are negotiating a restructuring plan with their creditors may benefit from a stay of individual enforcement actions, such as eviction, if and to the extent such a stay is necessary to support or make sustainable the negotiations of a restructuring plan.

Amendment 18 #

Proposal for a directive
Recital -1 a (new)

(–1) All workers should have the right to protection of their claims in the event of the insolvency of their employer, as set out in the European Social Charter.

Amendment 180 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 6 – paragraph 1

1. Member States shall ensure that debtors who are negotiating a restructuring or business wind-up plan with their creditors may benefit from a stay of individual enforcement actions if and to the extent such a stay is necessary to support the negotiations of a restructuring plan.

Amendment 181 #

Proposal for a directive
Article 6 – paragraph 2

2. Member States shall ensure that a stay of individual enforcement actions may be ordered in respect of all types of creditors, including secured and preferential creditors, particularly in the case of individual non-business debtors facing eviction from their habitual home or being deprived of utilities essential for maintaining a decent life, such as water, electricity and heating. The stay may be general, covering all creditors, or limited, covering one or more individual creditors, in accordance with national law.

Amendment 182 #

Edouard MARTIN, Jutta STEINRUCK, Agnes JONGERIUS, Javi LÓPEZ, Elena GENTILE, Sergio GUTIÉRREZ PRIETO

Proposal for a directive
Article 6 – paragraph 2

2. Member States shall ensure that a stay of individual enforcement actions may be ordered in respect of all types of creditors, including secured and preferential creditors but not including workers. The stay may be general, covering all creditors, or limited, covering one or more individual creditors, in accordance with national law.

Amendment 183 #

Proposal for a directive
Article 6 – paragraph 3

3. Paragraph 2 shall not apply to workers' outstanding claims except if and to the extent that Member States ensure by other means that the payment of such claims is guaranteed at a level of protection at least equivalent to that provided for under the relevant national law transposing Directive 2008/94/EC.

Amendment 184 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 6 – paragraph 3

Amendment 185 #

Proposal for a directive
Article 6 – paragraph 4

4. Member States shall limit the duration of the stay of individual enforcement actions to a maximum period of no more than four months; this deadline may be extended on a seasonal, temporary or indefinite basis in the case of non- business debtors in circumstances jeopardising decent living conditions for them or their immediate family, such as lack of a fixed abode or loss of access to essential utilities such as water, gas or electricity.

Amendment 186 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 6 – paragraph 5 – introductory part

5. Member States may ~~nevertheless~~, in any event, enable judicial or administrative authorities to extend the initial duration of the stay of individual enforcement actions or to grant a new stay of individual enforcement actions, upon request of the debtor or of creditors. Such extension or new period of stay of individual enforcement actions shall be granted only if there is evidence that:

Amendment 187 #

Proposal for a directive
Article 6 – paragraph 5 – point a

(a) relevant progress has been made in the negotiations on the restructuring plan or transfer of a going concern to another undertaking under the conditions laid down in this Directive; et

Amendment 188 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 6 – paragraph 5 – point b

(b) the continuation of the stay of individual enforcement actions does not unfairly prejudice the rights or interests of any affected parties. In order to avoid the domino effect of bankruptcies, particular attention shall be given to creditors with less than 50 employees.

Amendment 189 #

Proposal for a directive
Article 6 – paragraph 5 – point b a (new)

(ba) there are circumstances jeopardising decent living conditions for the individual or their immediate family, such as lack of a fixed abode or loss of access to essential utilities such as water, gas or electricity.

Amendment 19 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 1

(1) The objective of this Directive is to remove obstacles to the exercise of fundamental freedoms, such as the free movement of capital and freedom of establishment, w~~hich result from differences between national laws and procedures on preventive restructuring, insolvency and second chance~~ith due regard for the rules laid down by the Member States. This Directive aims at removing such obstacles by ensuring that viable enterprises in financial difficulties have access to effective national preventive restructuring frameworks which enable them to continue operating; and to preserve as many jobs as possible in the undertakings concerned and in the supplier businesses to which they are in debt, but also that honest over indebted entrepreneurs have a second chance after a full discharge of debt after a reasonable period of time; and that the effectiveness of restructuring, insolvency and discharge procedures is improved, in particular with a view to shortening their length.

Amendment 190 #

Proposal for a directive
Article 6 – paragraph 6

6. Any further extensions shall be given only if the conditions referred to in points (a), (b) and (ba) of paragraph 5 are met and the circumstances of the case show a strong likelihood that a restructuring plan will be adopted or, for non-business consumers, in the event of a serious deterioration in decent living conditions.

Amendment 191 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 6 – paragraph 7

7. The total duration of the stay of individual enforcement actions, including extensions and renewals, shall not exceed twelve months, for business debtors.

Amendment 192 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 6 – paragraph 8 – point a

(a) if – for business debtors only – it becomes apparent that a proportion of creditors who under national law could block the adoption of the restructuring plan does not support the continuation of the negotiations; o

Amendment 193 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 6 – paragraph 9

9. Member States shall ensure that, where an individual creditor or a single class of creditors is or would be unfairly prejudiced, thereby compromising their activity, by a stay of individual enforcement actions, the judicial or administrative authority may decide not grant the stay of individual enforcement actions or may lift a stay of individual enforcement actions already granted in respect of that creditor or class of creditors, at the request of the creditors concerned.

Amendment 194 #

Proposal for a directive
Article 6 – paragraph 9

9. Member States shall ensure that, where an individual creditor or a single class of creditors is or would be unfairly prejudiced by a stay of individual enforcement actions, the judicial or administrative authority may decide not grant the stay of individual enforcement actions or may lift a stay of individual enforcement actions already granted in respect of that creditor or class of creditors, at the request of the creditors concerned, provided that – in respect of non-business debtors – such a decision does not jeopardise decent living conditions.

Amendment 195 #

Edouard MARTIN, Jutta STEINRUCK, Agnes JONGERIUS, Javi LÓPEZ, Elena GENTILE, Sergio GUTIÉRREZ PRIETO

Proposal for a directive
Article 7

~~[...]~~deleted

Amendment 196 #

Proposal for a directive
Article 7 – paragraph 2

2. A general stay covering all creditors shall prevent the opening of insolvency procedures at the request of one or more creditors, with the exception of procedures requested by the workers under Article 6(3).

Amendment 197 #

Proposal for a directive
Article 7 – paragraph 2

2. A general stay covering all creditors shall prevent the opening of insolvency procedures at the request of one or more creditors, with the exception of workers according to article 6.3.

Amendment 198 #

Proposal for a directive
Article 7 – paragraph 3

3. Member States may derogate from paragraph 1 where the debtor becomes illiquid and therefore unable to pay his debts as they fall due during the stay period. In that case, Member States shall ensure that restructuring procedures are not automatically terminated and that, upon examining the prospects for achieving an agreement on a successful restructuring or going concern transfer plan within the period of the stay, a judicial or administrative authority may decide to defer the opening of insolvency procedure and keep in place the benefit of the stay of individual enforcement actions.

Amendment 199 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 7 – paragraph 4

4. Member States shall ensure that, during the stay period, creditors to which the stay applies may not withhold performance or terminate, accelerate or in any other way modify executory contracts to the detriment of the debtor for debts that came into existence prior to the stay. Member States may limit the application of this provision to essential contracts which are necessary for the continuation of the day-to-day operation of the business or of its suppliers/customers with less than 50 employees, so as to avoid the domino effect of bankruptcies.

Amendment 20 #

Proposal for a directive
Recital 1

(1) The objective of this Directive is to 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 on preventive restructuring, insolvency and second chance. This Directive aims at removing such obstacles by ensuring that viable enterprises and individual debtors acting in good faith, consumers and users in financial difficulties have access to effective national preventive restructuring frameworks which enable them to continue operating or, as appropriate, which enable them to maintain access to fundamental public and private goods and services, such as the supply of energy, heating and water, and to maintain decent housing, with a guarantee that they can keep minimum financial means so that they are able to maintain decent levels of subsistence; that honest over indebted entrepreneurs, consumers and users have a second chance after a full discharge of debt after a reasonable period of time; and that the effectiveness of restructuring, insolvency and discharge procedures is improved, in particular with a view to shortening their length.

Amendment 200 #

Proposal for a directive
Article 8 – paragraph 1 – point a a (new)

(aa) a statement setting out the presumption of honesty assessment criteria determined by the Member States for the purpose of implementing preventive restructuring and second chance framework provisions.

Amendment 201 #

Proposal for a directive
Article 8 – paragraph 1 – point b

(b) a valuation of the present value of the debtor, following problem solving or business divestiture procedures, or the debtor's business as well as a reasoned statement on the causes and the extent of the financial difficulties of the debtor;

Amendment 202 #

Proposal for a directive
Article 8 – paragraph 1 – point b

(b) a valuation of the present value of the debtor or the debtor's business as well as a reasoned statement on the causes and the extent of the financial difficulties of the debtor, including a detailed description of any assets, debts and their location; this shall include a relation of the financial obligations and flows with the business’ parent companies and subsidiaries in order to estimate the financial capacity of the debtors’ business group when joint responsibility may arise;

Amendment 203 #

Proposal for a directive
Article 8 – paragraph 1 – point f – point iii a (new)

(iiia) the impact on employment in the businesses concerned, including suppliers and subcontractors. Member States shall ensure that in businesses with more than 150 employees, workers’ representatives are allowed to appoint an independent expert, to be financed, according to their preference, by the business or by the State, for the purpose of giving prior consideration to the causes and the implications for the viability of the business, employment, and pay, and that they can make proposals as part of the information and consultation process (Directive 2002/14/EC).

Amendment 204 #

Proposal for a directive
Article 8 – paragraph 1 – point f – point iii a (new)

(iiia) the possibilities for selling businesses as going concerns, selling prices, or possible sale terms, the implications of those prices or terms for the dividends that creditors would receive compared with the dividend that a creditor would probably have received had the business in question been liquidated or the priority of creditors determined, and the consequences for workers, employment and activity, or for each stakeholder.

Amendment 205 #

Proposal for a directive
Article 8 – paragraph 1 – point f – point iii a (new)

(iiia) the impact on all types of pensions of retired and current workers.

Amendment 206 #

Proposal for a directive
Article 8 – paragraph 1 – point f – point iii a (new)

(iiia) its impact on the working conditions and remuneration of workers.

Amendment 207 #

Proposal for a directive
Article 8 – paragraph 1 – point f – point iii b (new)

(iiib) past and future commitments linked to bonuses and pensions, and the impact of the plan on those commitments.

Amendment 208 #

Proposal for a directive
Article 8 – paragraph 1 – point f – point iii b (new)

(iiib) its impact on subsidiaries and subcontractors.

Amendment 209 #

Proposal for a directive
Article 8 – paragraph 1 – point f – point iii c (new)

(iiic) a summary of the situation broken down by country, where restructuring operations are on a cross-border scale.

Amendment 21 #

Proposal for a directive
Recital 1

Amendment 210 #

Edouard MARTIN, Jutta STEINRUCK, Agnes JONGERIUS, Javi LÓPEZ, Elena GENTILE, Sergio GUTIÉRREZ PRIETO, Maria ARENA

Proposal for a directive
Article 8 – paragraph 1 – point g a (new)

(ga) an assessment of the employability and the individual and collective skills of the employees affected by the plan.

Amendment 211 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 8 – paragraph 1 a (new)

1a. Workers’ claims or other rights shall not be affected by restructuring plans, which shall take into account that any financial claims by workers shall take full priority.

Amendment 212 #

Edouard MARTIN, Jutta STEINRUCK, Agnes JONGERIUS, Javi LÓPEZ, Elena GENTILE, Sergio GUTIÉRREZ PRIETO, Maria ARENA

Proposal for a directive
Article 8 – paragraph 1 a (new)

1a. The rights and claims of employees shall not be affected by restructuring plans.

Amendment 213 #

Proposal for a directive
Article 8 – paragraph 2

2. Member States shall make a model for restructuring plans available online. That model shall contain at least the information required under national law and shall provide general but practical information on how the model is to be used. The model shall be made available in the co-official language or languages of the Member State. Member States shall endeavour to make the model available in other languages, in particular in languages used in international business. It shall be designed in such a way that it can be adapted to the needs and circumstances of every case.

Amendment 214 #

Proposal for a directive
Article 8 – paragraph 2

(2) Member States shall make a model for restructuring plans available online. That model shall contain at least the information required under national law and shall provide general but practical information on how the model is to be used. The model shall be made available in the official language or languages of the Member State. Member States shall endeavour to make the model available in other languages, in particular in languages used in international business. It shall be designed in such a way that it can be partially adapted to the needs and circumstances of every case.

Amendment 215 #

Edouard MARTIN, Jutta STEINRUCK, Agnes JONGERIUS, Javi LÓPEZ, Elena GENTILE, Sergio GUTIÉRREZ PRIETO, Maria ARENA

Proposal for a directive
Article 8 – paragraph 3 a (new)

3a. Member States shall ensure that workers’ representatives are able to appoint an expert of their choice, funded by the business, to give prior consideration to the causes and consequences for the viability of the business, employment, and pay, and that they are able to make proposals in the context of the information and consultation process (Directive 2002/14/EC).

Amendment 216 #

Proposal for a directive
Article 8 – paragraph 3 a (new)

3a. Member States shall ensure that their national legislation effectively guarantees the confidentiality of discussions, conversations, negotiations, or information sessions with persons who have entered into a confidentiality undertaking.

Amendment 217 #

Proposal for a directive
Article 8 – paragraph 3 b (new)

3b. The obligations of employers to inform and consult workers shall not be put into effect until a plan has been finalised.

Amendment 218 #

Proposal for a directive
Article 9 – paragraph 1

Amendment 219 #

Proposal for a directive
Article 9 – paragraph 1

1. Member States shall ensure that any 1. affected creditors, including workers, have a right to vote on the adoption of a restructuring plan. Member States may also grant such voting rights to affected equity holders, in accordance with Article 12(2).

Amendment 22 #

Proposal for a directive
Recital 1

Amendment 220 #

Proposal for a directive
Article 9 – paragraph 1

(1) Member States shall ensure that any affected creditors have a right to an informed vote on the adoption of a restructuring plan. Member States may also grant such voting rights to affected equity holders, in accordance with Article 12(2).

Amendment 221 #

Proposal for a directive
Article 9 – paragraph 1

1. Member States shall ensure that any affected creditors have a right to vote on the adoption of a restructuring plan. Member States may also grant such voting rights to affected equity holders, in accordance with Article 12(2). Before the vote, creditors shall be informed without undue delay of the causes and the consequences that the plan will entail for each of them.

Amendment 222 #

Proposal for a directive
Article 9 – paragraph 1 – subparagraph 1 a (new)

Member States shall ensure that the procedures provided for in national law are such that any creditors affected by a plan to sell a business as a going concern to another business, and which would not be repaid in full, would have the right to raise objections in the jurisdiction called upon to authorise the sale.

Amendment 223 #

Proposal for a directive
Article 9 – paragraph 1 – subparagraph 1 b (new)

Member States shall ensure that a debtor, having embarked on a confidential procedure, may at any time thereafter initiate a further procedure publicly, if it considers the latter to be necessary before the plan has been adopted or the sale has been authorised by the jurisdiction concerned.

Amendment 224 #

Proposal for a directive
Article 9 – paragraph 1 a (new)

1a. Member States shall ensure that business managers inform and consult their employees before and during negotiations. In particular, at every stage of early restructuring, worker interests should receive the utmost attention, and, for the purposes of insolvency proceedings, explicit reference should be made to Article 5(2) of Directive 2001/23/EC.

Amendment 225 #

Proposal for a directive
Article 9 – paragraph 2

2. Member States shall ensure that affected parties are treated in separate classes which reflect the class formation criteria. Classes shall be formed in such a way that each class comprises claims or interests with rights that are sufficiently similar to justify considering the members of the class a homogenous group with commonality of interest. As a minimum, secured and unsecured claims shall be treated in separate classes for the purposes of adopting a restructuring plan. Member States shall provide that salaries are treated in a separate class of their own. Member States may also provide that ~~worker~~pensions are treated in a separate class of their own.

Amendment 226 #

Proposal for a directive
Article 9 – paragraph 2

(2) Member States shall ensure that affected parties are treated in separate classes which reflect the class formation criteria. Classes shall be formed in such a way that each class comprises claims or interests with rights that are sufficiently similar to justify considering the members of the class a homogenous group with commonality of interest. As a minimum, secured and unsecured claims shall be treated in separate classes for the purposes of adopting a restructuring plan. Member States ~~may~~shall also ~~provid~~ensure that workers are treated in a separate class of their own.

Amendment 227 #

Proposal for a directive
Article 9 – paragraph 2

2. Member States shall ensure that affected parties are treated in separate classes which reflect the class formation criteria. Classes shall be formed in such a way that each class comprises claims or interests with rights that are sufficiently similar to justify considering the members of the class a homogenous group with commonality of interest. As a minimum, secured and unsecured claims shall be treated in separate classes for the purposes of adopting a restructuring plan. Member States ~~may~~shall also provide that workers are treated in a separate class of their own. and guarantee the priority of their claims

Amendment 228 #

Proposal for a directive
Article 9 – paragraph 2

2. Member States shall ensure that affected parties are treated in separate classes which reflect the class formation criteria. Classes shall be formed in such a way that each class comprises claims or interests with rights that are sufficiently similar to justify considering the members of the class a homogenous group with commonality of interest. As a minimum, secured and unsecured claims shall be treated in separate classes for the purposes of adopting a restructuring plan. ~~Member States~~Except in duly justified circumstances, Member States shall provide that workers are treated as a separate preferential class and may also provide that retired workers are treated in a separate class of their own.

Amendment 229 #

Proposal for a directive
Article 9 – paragraph 2

2. Member States shall ensure that affected parties are treated in separate classes which reflect the class formation criteria. Classes shall be formed in such a way that each class comprises claims or interests with rights that are sufficiently similar to justify considering the members of the class a homogenous group with commonality of interest. As a minimum, secured and unsecured claims shall be treated in separate classes for the purposes of adopting a restructuring plan. Member States may also provide that outstanding wage claims for both active and retired workers are treated in a separate class of their own.

Amendment 23 #

Proposal for a directive
Recital 1

Amendment 230 #

Edouard MARTIN, Jutta STEINRUCK, Agnes JONGERIUS, Javi LÓPEZ, Elena GENTILE, Sergio GUTIÉRREZ PRIETO

Proposal for a directive
Article 9 – paragraph 2

2. Member States shall ensure that parties affected ~~parties~~by a waiver plan are treated in separate classes which reflect the class formation criteria. Classes shall be formed in such a way that each class comprises claims or interests with rights that are sufficiently similar to justify considering the members of the class a homogenous group with commonality of interest. As a minimum, secured and unsecured claims shall be treated in separate classes for the purposes of adopting a restructuring plan. Member States may also provide that workers are treated in a separate class of their own.

Amendment 231 #

Proposal for a directive
Article 9 – paragraph 3 a (new)

3a. Member States shall ensure that, where the bids received are equal, preferential rights are accorded to the workers in order to place them in the best position to make a takeover bid should their business be closed down.

Amendment 232 #

Proposal for a directive
Article 9 – paragraph 4

4. A restructuring plan shall be deemed to be adopted by affected parties, provided that a majority in the amount of their claims or interests is obtained in each and every class and that the class of workers obtains the majority. Member States shall lay down the required majorities for the adoption of a restructuring plan, which shall be in any case not higher than 75% in the amount of claims or interests in each class.

Amendment 233 #

Proposal for a directive
Article 9 – paragraph 4

(4) A restructuring plan shall be deemed to be adopted by affected parties, provided that a majority in the amount of their claims or interests and in terms of the number of members with voting rights is obtained in each and every class. Member States shall lay down the required majorities for the adoption of a restructuring plan, which shall be in any case not higher than 75% in the amount of claims or interests in each class.

Amendment 234 #

Proposal for a directive
Article 9 – paragraph 4

4. A restructuring plan shall be deemed to be adopted by affected parties, provided that a majority in the amount of their claims or interests is obtained in each and every class. Member States shall lay down the required majorities for the adoption of a restructuring plan, which shall be in any case not higher than 75% in the amount of claims or interests in each class. A sale plan shall be authorised by the competent jurisdiction under the national procedure allowing the sale to be authorised and effected.

Amendment 235 #

Proposal for a directive
Article 9 – paragraph 5

(5) Member States may stipulate that a vote on the adoption of a restructuring plan takes the form of a consultation and agreement of a requisite majority of affected parties in each class, in accordance with national laws.

Amendment 236 #

Proposal for a directive
Article 9 – paragraph 5

5. Member States may stipulate that a vote on the adoption of a restructuring plan takes the form of a consultation and agreement of a requisite majority of affected parties in each class. In the workers’ class this vote shall be held in compliance with national laws.

Amendment 237 #

Proposal for a directive
Article 9 – paragraph 6

6. With the exemption of the class of workers, where the necessary majority is not reached in one or more dissenting voting classes, the plan may still be confirmed if it complies with the cross- class cram-down requirements set out in Article 11.

Amendment 238 #

Proposal for a directive
Article 9 – paragraph 6 a (new)

6a. Member States shall guarantee that in the case of lack of collaboration of other creditors, the worker’s restructuring plan may be presented to the competent administration or court and adopted without the consent of non-cooperative creditors.

Amendment 239 #

Proposal for a directive
Article 10 – paragraph 1 – point a

(a) restructuring plans which adversely affect the interests of ~~dissenting affected parties~~workers and supplier creditors whose activities are directly threatened by a restructuring plan;

Amendment 24 #

Proposal for a directive
Recital 1

Amendment 240 #

Proposal for a directive
Article 10 – paragraph 1 – subparagraph 1 a (new)

Member States shall ensure that plans to sell a business as a going concern cannot become binding on the parties unless they are confirmed by a judicial or administrative authority under national law.

Amendment 241 #

Proposal for a directive
Article 10 – paragraph 1 – subparagraph 1 b (new)

In each of the cases referred to in this paragraph, Member States shall ensure that the procedures provided for in national law are such that workers have the right to submit comments to, or raise objections before, the judicial or administrative authority called upon to rule on the confirmation of the plan.

Amendment 242 #

Proposal for a directive
Article 10 – paragraph 2 – point a a (new)

(aa) the procedure and time-frames for informing and notifying interested parties are clearly stated;

Amendment 243 #

Proposal for a directive
Article 10 – paragraph 2 – point b

(b) the restructuring plan complies with the best interest of creditors and employment test;

Amendment 244 #

Edouard MARTIN, Jutta STEINRUCK, Agnes JONGERIUS, Javi LÓPEZ, Elena GENTILE, Sergio GUTIÉRREZ PRIETO

Proposal for a directive
Article 10 – paragraph 2 – point c

(c) any new financing is necessary to implement the restructuring plan and does not unfairly prejudice the interests of creditors or employment.

Amendment 245 #

Proposal for a directive
Article 10 – paragraph 2 – point c a (new)

(ca) any restructuring plan which is the subject of counter-proposals from the workers’ class, in particular to further those which include a change of shareholder supported by the workers’ class, or any restructuring plan making workers the future buyers.

Amendment 246 #

Proposal for a directive
Article 10 – paragraph 2 – point c a (new)

(ca) any alternative plan submitted by the workers within a reasonable time that would enable jobs to be preserved to the greatest possible extent in Europe. Alternative plans of this kind may include a permanent or temporary change in the share ownership in the form of a public or private holding.

Amendment 247 #

Proposal for a directive
Article 10 – paragraph 2 – point c a (new)

(ca) workers’ representatives have been informed and consulted.

Amendment 248 #

Proposal for a directive
Article 10 – paragraph 2 – point c a (new)

(ca) it has been approved by the class of workers.

Amendment 249 #

Proposal for a directive
Article 10 – paragraph 2 – point c b (new)

(cb) the competent authority must consider any alternative plan proposed by a representative group of employees before confirming any restructuring plan entailing job losses of more than 30% or more than 20% if the business concerned has more than 50 employees.

Amendment 25 #

Proposal for a directive
Recital 1

(1) The objective of this Directive is to contribute to the proper functioning of the internal market by removeing 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 on preventive restructuring, insolvency and second chance. This Directive aims at removing such obstacles by ensuring that viable enterprises in financial difficulties have access to effective national preventive restructuring frameworks which enable them to continue operating; that honest over indebted entrepreneurs have a second chance after a full discharge of debt after a reasonable period of time; and that the effectiveness of restructuring, insolvency and discharge procedures is improved, in particular with a view to shortening their length.

Amendment 250 #

Proposal for a directive
Article 10 – paragraph 2 – point c c (new)

(cc) the competent authority must consider any plan involving the temporary acquisition of an owning interest by a public authority with a view to offering an alternative to any restructuring plan entailing the loss of a significant number of jobs in the Member State concerned.

Amendment 251 #

Proposal for a directive
Article 10 – paragraph 3

3. Member States shall ensure that judicial or administrative authorities may refuse to confirm a restructuring plan involving the waiver of claims where that plan does not have a reasonable prospect of preventing the insolvency of the debtor and ensuring the viability of the business or where the debtor’s obligations to workers under existing Directives have not been fulfilled. Member States shall ensure that judicial or administrative authorities may refuse to authorise a sale plan where that plan is such that creditors have no reasonable prospect of being paid a dividend at least equivalent to the amount which they would have received if assets had been sold following a bankruptcy procedure or where the business continuing as a going concern does not offer guarantees as to the viability of the operations transferred.

Amendment 252 #

Proposal for a directive
Article 10 – paragraph 4

4. Member States shall ensure that where a judicial or administrative authority is required to confirm a restructuring plan in order for it to become binding, a decision is taken without undue delay after the complete request for confirmation has been filed and in any case no later than 30 days after the request is filed.

Amendment 253 #

Proposal for a directive
Article 10 – paragraph 4

4. Member States shall ensure that where a judicial or administrative authority is required to confirm a restructuring plan or authorise a sale plan in order for it to become binding, a decision is taken without undue delay after the request for confirmation has been filed and in any case no later than 30 days after the request is filed.

Amendment 254 #

Proposal for a directive
Article 11

Klassenübergreifender Cram-down (1) restructuring plan which is not approved by each and every class of affected parties may be confirmed by a judicial or administrative authority upon the proposal of a debtor or of a creditor with the debtor's agreement and become binding upon one or more dissenting classes where the restructuring plan: (a) 10(2); (b) class of affected creditors other than an equity-holder class and any other class which, upon a valuation of the enterprise, would not receive any payment or other consideration if the normal ranking of liquidation priorities were applied; (c) rule. (2) minimum number of affected classes required to approve the plan laid down in point (b) of paragraph (1).Artikel 11 deleted Member States shall ensure that a fulfils the conditions in Article has been approved by at least one complies with the absolute priority Member States may vary the

Amendment 255 #

Proposal for a directive
Article 11 – paragraph 1 – point b a (new)

(ba) has been approved by the class of workers;

Amendment 256 #

Proposal for a directive
Article 12 – paragraph 1

1. Member States shall ensure that, where there is a likelihood of insolvency, shareholders and other equity holders with interests in a debtor may not unreasonably prevent the adoption or implementation of a restructuring plan which would restore the viability of the business or prevent a domino effect.

Amendment 257 #

Proposal for a directive
Article 13 – paragraph 1

1. A liquidation value shall be determined by the judicial or administrative authority where a restructuring plan or a sale plan is challenged on the grounds of an alleged breach of the best interest of creditors test.

Amendment 258 #

Proposal for a directive
Article 13 – paragraph 2 – introductory part

2. An enterprise value shall be determined by the judicial or administrative authority on the basis of the value of the enterprise as a going concern and the value of the proceeds from the sale of its assets by the insolvency practitioner in an insolvency procedure in the following cases:

Amendment 259 #

Proposal for a directive
Article 13 – paragraph 2 – point b a (new)

(ba) where a plan involves the transfer of all or part of a business.

Amendment 26 #

Proposal for a directive
Recital 1

(1) The objective of this Directive is to 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 on preventive restructuring, insolvency and second chance. This Directive aims at removing such obstacles by ensuring that viable enterprises in financial difficulties have access to effective national preventive restructuring frameworks which enable them to continue operating; that honest over indebted entrepreneurs have a second chance after a full discharge of debt after a reasonable period of time; and that the effectiveness of restructuring, insolvency and discharge procedures is improved, in particular with a view to shortening their length. Preventive solutions, sometimes called ‘pre-pack’, are a feature of a growing trend in modern insolvency law towards favouring approaches which, unlike the traditional approach of liquidating a business which is in crisis, have the aim of restoring it to health or at least salvaging those of its units that are still economically viable. That practice is praiseworthy and often helps to preserve jobs.

Amendment 260 #

Proposal for a directive
Article 14 – paragraph 2

2. ~~Creditors who are not involved in the adoption of a restructuring plan shall not be affected by the plan~~The Member States shall ensure that a national risk mutualisation fund is established to guarantee employees payment of their salaries.

Amendment 261 #

Proposal for a directive
Article 15 – paragraph 4 – point b

(b) confirm the plan and grant monetary compensation to the dissenting creditors, payable by the debtor or by the creditors who voted in favour of the plan. This compensation must take account of the primary need to safeguard jobs and prevent the domino effect of bankruptcies.

Amendment 262 #

Proposal for a directive
Article 16 – paragraph 1

1. Member States shall ensure that new financing and interim financing are adequately encouraged and protected. In particular, new and interim financing shall not be declared void, voidable or unenforceable as an act detrimental to the general body of creditors in the context of subsequent insolvency procedures, unless such transactions have been ~~carried out fraudulently or in bad faith~~offset by the extremely high return granted contractually by the entrepreneur or were carried out fraudulently or in bad faith. That is the case if the period covered by the financing solution was unreasonably short.

Amendment 263 #

Proposal for a directive
Article 16 – paragraph 2

2. Member States may afford grantors of new or interim financing the right to receive payment with priority in the context of subsequent liquidation procedures in relation to other creditors that would otherwise have superior or equal claims to money or assets. In such cases, Member States shall rank new financing and interim financing at least senior to the claims of ordinary unsecured creditors.deleted

Amendment 264 #

Proposal for a directive
Article 16 – paragraph 3

3. The grantors of new financing and interim financing in a restructuring process shall be exempted from civil, administrative and criminal liability in the context of the subsequent insolvency of the debtor, unless such financing has been granted fraudulently or in bad faith.deleted

Amendment 265 #

Proposal for a directive
Article 17 – paragraph 2 – point c

(c) the payment of worker wages ~~for work already carried out;~~ and any other payments resulting from contractual obligations with the workers;

Amendment 266 #

Proposal for a directive
Article 17 – paragraph 2 – point e

(e) transactions such as new credit, financial contributions or partial asset transfers outside the ordinary course of business made in contemplation of and closely connected with negotiations for a restructuring plan, unless such transactions have been offset by the extremely high return granted contractually by the entrepreneur or were carried out fraudulently or in bad faith. That is the case if the period covered by the financing solution was unreasonably short.

Amendment 267 #

Proposal for a directive
Article 17 – paragraph 4

4. Member States shall ensure that any 4. transaction, payment, debt-equity swap, guarantee or security carried out to further the implementation of a restructuring plan confirmed by a judicial or administrative authority or closely connected with such implementation is not declared void, voidable or unenforceable as an act detrimental to the general body of creditors in the context of subsequent insolvency procedures, unless such transactions have been ~~carried out fraudulently or in bad faith~~offset by the extremely high return granted contractually by the entrepreneur or were carried out fraudulently or in bad faith. That is the case if the period covered by the financing solution was unreasonably short, irrespective of whether such transactions were deemed to be in the ordinary course of business.

Amendment 268 #

Proposal for a directive
Article 18 – paragraph 1 – point a

(a) to take immediate steps to minimise the loss for creditors, workers, shareholders and other stakeholders, including employment and the interests and rights of workers;

Amendment 269 #

Proposal for a directive
Article 18 – paragraph 1 – point b

(b) to have due regard to the interests of creditors and other stakeholders; directors should be prohibited from reducing the assets of the business to below the level necessary to meet the commitments they have towards their employees.

Amendment 27 #

Proposal for a directive
Recital 2

(2) Restructuring should enable enterprises in financial difficulties for which they are not responsible to continue business in whole or in part, by changing the composition, conditions or structure of assets and liabilities or of their capital structure, including by sales of assets or parts of the business. Preventive restructuring frameworks should above all enable the enterprises to restructure at an early stage ~~and to avoid their insolvency~~. Those frameworks should maximise the total value to ~~creditors,~~ owners and the economy as a whole and should prevent unnecessary job losses and losses of knowledge and skills. ~~They should also prevent the build-up of non-performing loans.~~ In the restructuring process the rights of all parties involved should be protected. ~~At the same time, non-viable businesses with no prospect of survival should be liquidated as quickly as possible.~~

Amendment 270 #

Proposal for a directive
Article 18 – paragraph 1 – point d a (new)

(da) to fulfil, in the manner most compatible with confidentiality, the obligations arising from the directives granting rights to workers.

Amendment 271 #

Proposal for a directive
Article 18 – paragraph 1 – point d a (new)

(da) to avoid the payment of irresponsible bonuses to directors.

Amendment 272 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 18 – paragraph 1 a (new)

1a. National law shall provide for a diminished liability regime for managers who comply with subparagraph 1 and an aggravated sanction regime for managers who have not done so, either with intent to defraud or with obvious bad faith, or for managers who, despite being alerted by workers or their representatives to a risk of insolvency, did not take the immediate steps referred to above or who misused the restructuring procedures by not minimising the loss for creditors, workers and other stakeholders.

Amendment 273 #

Proposal for a directive
Title 3

SECOND CHANCE FOR ENTREPRENEURS AND CONSUMERS

Amendment 274 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 19 – paragraph 1

(1) Member States shall ensure that over-indebted entrepreneurs may be fully discharged of their debts in accordance with this Directive and that creditors can receive maximised dividends.

Amendment 275 #

Proposal for a directive
Article 19 – paragraph 1

1. Member States shall ensure that over-indebted entrepreneurs and non- business consumers may be fully discharged of their debts in accordance with this Directive.

Amendment 276 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 19 – paragraph 1

1. Member States shall ensure that over-indebted entrepreneurs may be fully discharged of their debts in accordance with this Directive, while guaranteeing the payment of all claims by workers.

Amendment 277 #

Proposal for a directive
Article 19 – paragraph 2

2. Member States in which a full discharge of debt is conditional on a partial repayment of debt by the entrepreneur or non-business consumer shall ensure that the related repayment obligation is based on the individual situation of the entrepreneur or consumer and is notably proportionate to his or her disposable income over the discharge period. and is not likely to deprive them of the financial means and/or access to goods and services needed to ensure a decent living for them and their immediate family.

Amendment 278 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 19 – paragraph 2

2. Member States in which a full discharge of debt is conditional on a partial repayment of debt by the entrepreneur shall ensure that the related repayment obligation is based on the individual situation of the entrepreneur and is notably proportionate to his or her disposable income over the discharge period. The criteria of honest professional behaviour by which the reliability of entrepreneurs is judged must be verified and such behaviour must be attested by appropriate documents issued by the authorities. Such documents shall serve to justify recourse to second chance.

Amendment 279 #

Proposal for a directive
Article 20 – paragraph 1 – introductory part

1. The period of time after which over-indebted entrepreneurs and non- business consumers may be fully discharged from their debts shall be no longer than three years starting from:

Amendment 28 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 2

(2) Restructuring should enable enterprises and consumers in financial difficulties to continue business in whole or in part, and ensure that they can maintain decent levels of subsistence, by changing the composition, conditions or structure of assets and liabilities or of their capital or property structure, including by sales of assets, property or parts of the business. Preventive restructuring frameworks should above all enable the enterprises and individual consumers to restructure at an early stage and to avoid their insolvency. Those frameworks should maximise the total value to creditors, owners and the economy as a whole and should prevent both unnecessary job losses and losses of knowledge and skills, and an increase in poverty and risk of exclusion among honest over-indebted consumers who are not entrepreneurs. They should also prevent the build-up of non- performing loans and debts. In the restructuring process the rights of all parties involved should be protected, especially those of particularly vulnerable individuals at risk of falling into poverty or social exclusion. At the same time, non- viable businesses with no prospect of survival should be liquidated as quickly as possible.

Amendment 280 #

Proposal for a directive
Article 20 – paragraph 1 – point a

(a) the date on which the judicial or administrative authority decided on the application to open such a procedure, in the case of a procedure ending with the liquidation of an over-indebted entrepreneur' s assets; ordeleted

Amendment 281 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 20 – paragraph 1 – point b

~~(b) the date on which implementation of the repayment plan started, in the case of a procedure which includes a repayment plan.~~deleted

Amendment 282 #

Proposal for a directive
Article 20 – paragraph 2

2. Member States shall ensure that on expiry of the discharge period, over- indebted entrepreneurs and non-business consumers are discharged of their debts without the need to re-apply to a judicial or administrative authority.

Amendment 283 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO

Proposal for a directive
Article 21 a (new)

Article 21a Evictions and access to the basic goods and services needed to ensure a decent living Member States shall ensure that, when an over-indebted, non-business consumer begins a debt restructuring or discharge procedure pursuant to this Directive, any proceedings to evict them or deprive them of access to basic goods and services needed to ensure decent living conditions as a result of such over-indebtedness shall cease, with no need for recourse to a court or administrative authority.

Amendment 284 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 22 – paragraph 1 – introductory part

1. By way of derogation from Articles 19, 20, 21 and 21(a), Member States may maintain or introduce provisions restricting access to discharge or laying down longer periods for obtaining a full discharge or longer disqualification periods in certain well-defined circumstances and where such limitations are justified by a general interest, in particular where:

Amendment 285 #

Proposal for a directive
Article 22 – paragraph 1 – point b

(b) the over-indebted entrepreneur does not adhere to a repayment plan or to any other legal obligation aimed at safeguarding the interests of creditors, particularly where he misuses the insolvency procedure in order to deprive workers of their rights;

Amendment 286 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Article 22 – paragraph 4

4. By way of derogation from Article 21, Member States ~~may~~shall provide for longer or indefinite disqualification periods where the over-indebted entrepreneur is a member of a profession to which specific ethical rules apply or where disqualifications were ordered by a court in criminal proceedings.

Amendment 287 #

Proposal for a directive
Article 23 – paragraph 1

1. Member States shall ensure that, ~~where~~both for an over-indebted entrepreneur has professional debts incurred in the course of his or her trade, business, craft or profession as well as personal debts incurred outside those activities, and for an over-indebted non-business consumer, all debts are treated in a single procedure for the purposes of obtaining a discharge.

Amendment 288 #

Proposal for a directive
Article 23 – paragraph 2 a (new)

2a. Member States may extend the scope of this Directive to cover natural persons if they see fit.

Amendment 289 #

Proposal for a directive
Article 25 – paragraph 2

2. Member States shall encourage, by any means which they consider appropriate, the development of, and adherence to~~, voluntary~~ a codes of conduct by practitioners in the field of restructuring, insolvency and second chance, as well as other effective oversight mechanisms concerning the provisions of such services, such as licensing and registration.

Amendment 29 #

Proposal for a directive
Recital 2

Amendment 290 #

Proposal for a directive
Article 26 – paragraph 3

(3) Where practitioners in the field of restructuring, insolvency and second chance are appointed by the judicial or administrative authority, Member States shall ensure that the criteria concerning the manner in which the judicial or administrative authority selects such a practitioner are clear and transparent. In selecting a practitioner in the field of restructuring, insolvency and second chance for a particular case, due consideration shall be given to the practitioner's experience and expertise. ~~Where appropriate, the debtors and creditors shall be consulted in the selection of the practitioner.~~

Amendment 291 #

Proposal for a directive
Article 26 – paragraph 4 a (new)

4a. When the restructuring procedures have been completed, the entrepreneurs and creditors shall be consulted in order to evaluate the performance of the practitioner in terms of saving jobs both in the undertaking and in the creditors’ undertakings.

Amendment 292 #

Proposal for a directive
Article 27 – paragraph 1

1. Member States shall put in place appropriate oversight and regulatory structures to ensure that the work of practitioners in the field of restructuring, insolvency and second chance is appropriately supervised. This oversight and regulation shall also include an appropriate and effective regime for identifying and sanctioning practitioners who have failed in their duties. This oversight and regulation shall also include an appropriate and effective regime for identifying and sanctioning vulture funds which have repeatedly taken action to the detriment of employment without genuinely participating in the objectives of the preventive restructuring.

Amendment 293 #

Proposal for a directive
Article 28 – paragraph 1 – point c

Amendment 294 #

Proposal for a directive
Article 29 – paragraph 1 – subparagraph 1 – point g a (new)

(ga) the number of jobs at risk at the opening of a procedure and the number of jobs maintained at the end of the procedure. The number of indirect jobs with creditors/suppliers shall also be counted.

Amendment 295 #

Proposal for a directive
Article 29 – paragraph 1 – subparagraph 1 – point g a (new)

(ga) the number of job losses, transfer of part or whole of the business, part redundancy and impact of restructuring agreements on the employment and the level of public finance;

Amendment 296 #

Proposal for a directive
Article 29 – paragraph 1 – subparagraph 1 – point g b (new)

(gb) an evaluation on the work carried by the practitioners and its results;

Amendment 297 #

Proposal for a directive
Article 29 – paragraph 4

4. The Commission shall establish the communication form referred to in paragraph 3 by way of ~~implementing acts. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 30(2)~~delegated acts.

Amendment 298 #

Proposal for a directive
Article 30 a (new)

Article 30 a Obligation to report 1. Any debtor involved in a restructuring, insolvency or discharge procedure in a Member State that also operates in another Member State shall report to the competent authority, administration or court of both countries the beginning of any of these procedures. 2. The debtor is obliged to report the activity, volume and structure of its business in other Member States or third countries, segregated country by country, to the administration of court involved in the restructuring, insolvency or discharge procedure.

Amendment 30 #

Proposal for a directive
Recital 2

Amendment 31 #

Proposal for a directive
Recital 2

(2) Restructuring, the result of appropriate and viable expert reports, should enable enterprises in financial difficulties to continue business in whole or in part, by changing the composition, conditions or structure of assets and liabilities or of their capital structure, including by sales of assets or parts of the business. Preventive restructuring frameworks should above all enable the enterprises to restructure at an early stage and to avoid their insolvency. Those frameworks should maximise the total value to creditors, owners and the economy as a whole and should prevent unnecessary job losses and losses of knowledge and skills. They should also prevent the build- up of non-performing loans. In the restructuring process the rights of all parties involved should be protected. At the same time, non-viable businesses with no prospect of survival should be liquidated as quickly as possible.

Amendment 32 #

Proposal for a directive
Recital 2

Amendment 33 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 3

(3) There are differences between the Member States as regards the range of the procedures available to ~~debto~~entrepreneurs in financial difficulties in order to restructure their business. Some Member States have a limited range of procedures meaning that businesses are only able to restructure at a relatively late stage, in the context of insolvency procedures. In other Member States, restructuring is possible at an earlier stage ~~but the procedures available are not as effective as they could be or are very formal, in particular limiting the use of out-of-court processes~~. Similarly, national rules giving entrepreneurs a second chance, in particular by granting them discharge from the debts they have incurred in the course of their business, vary between Member States in respect of the length of the discharge period and the conditions for granting such a discharge. (This amendment, replacing the word ‘debtor’ with the word ‘entrepreneur’, applies throughout the text; adopting it will necessitate corresponding changes throughout.)

Amendment 34 #

Proposal for a directive
Recital 3

(3) There are differences between the Member States as regards the range of the procedures available to debtors in financial difficulties in order to restructure their business or debts, in the case of consumers who are not entrepreneurs. Some Member States have a limited range of procedures meaning that businesses are only able to restructure at a relatively late stage, in the context of insolvency procedures. In other Member States, restructuring is possible at an earlier stage but the procedures available are not as effective as they could be or are very formal, in particular limiting the use of out- of-court processes. Similarly, according to recently published studies1a, there are different models for the treatment of over- indebtedness among consumers, individuals and families across Europe. Mention might be made of three specific models1b: the Anglo-Saxon or market model, the Franco-Scandinavian or debtor rehabilitation model, and the Germanic model of debtor responsibility. Indeed, in some European Union countries such as Spain and Bulgaria these procedures are virtually non- existent in the case of natural persons who are not entrepreneurs. With regard to national rules giving entrepreneurs a second chance, in particular by granting them discharge from the debts they have incurred in the course of their business, these vary between Member States in respect of the length of the discharge period and the conditions for granting such a discharge. __________________ 1a Study on a new approach to business failure and insolvency. Published by EC DG for JUSTICE and CONSUMERS: http://ec.europa.eu/justice/civil/files/insolv ency/insolvency_study_2016_final_en.pdf (24.05.2017) 1bGutiérrez-Peris, D. Viavoice (2015) Personal insolvency laws in Europe

Amendment 35 #

Proposal for a directive
Recital 3 a (new)

(3a) Early recourse to preventive restructuring should not have the effect of whittling down workers’ rights, particularly with regard to their pay and working conditions, but also with regard to their rights to representation and, more generally, to conduct a normal relationship between social partners, in particular as regards information and consultation.

Amendment 36 #

Edouard MARTIN, Jutta STEINRUCK, Agnes JONGERIUS, Javi LÓPEZ, Elena GENTILE, Sergio GUTIÉRREZ PRIETO, Maria ARENA

Proposal for a directive
Recital 3 a (new)

(3a) Workers’ representatives should be given a whistleblower role with regard to the state of health of their company. In addition, the use of expert evaluations as part of restructuring plans should be guaranteed and promoted, particularly evaluations relevant to buy-outs of companies by their employees.

Amendment 37 #

Proposal for a directive
Recital 3 a (new)

(3a) The Member States should examine the possibility of devising mechanisms to prevent excessive or abusive recourse to experts at the expense of an undertaking on the part of employees, since such recourse would ultimately have a negative impact on the financial situation of the undertaking.

Amendment 38 #

Proposal for a directive
Recital 3 a (new)

(3a) A common legislative framework will be positive for the interests of businesses and entrepreneurs wishing to extend their activity to other Member States and for transnational investors, since legal uncertainty will be reduced.

Amendment 39 #

Proposal for a directive
Recital 3 b (new)

(3b) Early restructuring may entail the exceptional renegotiation of working conditions, including pay, if this serves the normal continuation of business activity and the maintenance of jobs.

Amendment 40 #

Proposal for a directive
Recital 3 b (new)

(3b) Special treatment should be accorded to retired workers whose pensions depend, entirely or in part, on company pension plans and who might be harmed by early restructuring.

Amendment 41 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 4

(4) In many Member States it takes more than three years for bankrupt, but honest entrepreneurs to discharge their debts and make a fresh start. Inefficient second chance frameworks result in entrepreneurs having to relocate in other jurisdictions in order to benefit from a fresh start in a reasonable period of time, at considerable additional costs to both their creditors and the debtors themselves. Long disqualification orders which often accompany a procedure leading to discharge create obstacles to the freedom to take up and pursue a self-employed, entrepreneurial activity.

Amendment 42 #

Proposal for a directive
Recital 4

(4) In many Member States it takes more than three years for bankrupt, but honest entrepreneurs or honest over- indebted consumers who are not entrepreneurs to discharge their debts and make a fresh start. Inefficient second chance frameworks result in entrepreneurs having to relocate in other jurisdictions in order to benefit from a fresh start in a reasonable period of time, or consumers who are not entrepreneurs frequently being thrown into poverty and exclusion or facing living and subsistence conditions that are a violation of human rights and the right to maintain decent living standards. This all comes at considerable additional costs to both their creditors and the debtors themselves, and for society as a whole. Long disqualification orders or eviction which often accompany a procedure leading to discharge create obstacles to the freedom to take up and pursue a self-employed, entrepreneurial activity and violate people’s dignity.

Amendment 43 #

Proposal for a directive
Recital 4

(4) In many Member States it takes more than three years for bankrupt, but honest entrepreneurs to discharge their debts and make a fresh start. Inefficient second chance frameworks result in entrepreneurs having to relocate in other jurisdictions in order to benefit from a fresh start in a reasonable period of time, at considerable additional costs to both their creditors and the debtors themselves. Long disqualification orders which often accompany a procedure leading to discharge create obstacles to the freedom to ~~take up and pursue a self-employed,~~pursue entrepreneurial activity.

Amendment 44 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 4 a (new)

(4a) A second chance should be seen as a step towards success and not a synonym for failure. Second-chance mechanisms that allow the exoneration of unpaid debt for those debtors who are considered as acting in good faith represent a disincentive for the black economy and foster the business culture, which will always have a positive effect on employment. Member States may extend second chance to natural persons.

Amendment 45 #

Proposal for a directive
Recital 5

(5) Excessive length of restructuring, insolvency and discharge procedures in several Member States, or the virtual inexistence of these procedures in some cases, is an important factor triggering low business recovery rates ~~and~~, deterring investors from making business in ~~jurisdictions where procedures risk taking too long~~the countries concerned and dramatically contributing to the increase in the number of citizens at risk of poverty or social and labour exclusion, undermining the social and economic resilience of society as a whole.

Amendment 46 #

Proposal for a directive
Recital 5

(5) Excessive length of restructuring, insolvency and discharge procedures in several Member States is an important factor triggering longstanding damage for the workers concerned, low recovery rates and deterring investors from making business in jurisdictions where procedures risk taking too long.

Amendment 47 #

Proposal for a directive
Recital 6

(6) ~~All these differences translate into additional costs for investors when assessing~~Many investors mention uncertainty about insolvency rules or the risks of debtors entering financial difficulties in one or more Member States and the costs of restructuring companies having establishments, creditors or assets in other Member States, such as is most clearly the case of restructuring international groups of companies. Many investors mention uncertainty about insolvency rules or the risk of lengthy or complex insolvency procedures in another country as a main reason for not investing or not entering into a business relationship with a counterpart outside their own countrylengthy or complex insolvency procedures in another country as a main reason for not investing or not entering into a business relationship with a counterpart outside their own country. Fortunately, in some Member States, to protect their production and employees, these differences translate into additional costs to investors when they assess the risks associated with entrepreneurs in financial difficulties. It is true that costs are incurred by undertakings in the course of restructuring which have establishments, creditors or assets in other Member States; the most obvious example is the restructuring of international groups of undertakings.

Amendment 48 #

Proposal for a directive
Recital 6

(6) All these differences translate into additional costs for investors or banks when assessing the risks of debtors entering financial difficulties in one or more Member States or when assessing the risks associated with taking over viable operations run by undertakings in difficulty and the costs of restructuring companies having establishments, creditors or assets in other Member States, such as is most clearly the case of restructuring international groups of companies. Many investors mention uncertainty about insolvency rules or the risk of lengthy or complex insolvency procedures in another country as a main reason for not investing or not entering into a business relationship with a counterpart outside their own country.

Amendment 49 #

Proposal for a directive
Recital 6

(6) All these differences translate into additional costs for investors when assessing the risks of debtors entering financial difficulties in one or more Member States and the costs of restructuring companies having establishments, creditors or assets in other Member States, such as is most clearly the case of restructuring international groups of companies. Many investors mention uncertainty about insolvency rules or the risk of lengthy or complex insolvency procedures in another country as a main reason for not investing or not entering into a business relationship with a counterpart outside their own country. This uncertainty therefore acts as a disincentive which obstructs the freedom of establishment of undertakings and harms the proper functioning of the internal market.

Amendment 50 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 7

(7) Those differences ~~lead to uneven~~damage conditions for access to credit ~~and to uneven recovery rates in the Member States. A higher degree of harmonisation in~~for honest entrepreneurs because certain dishonest entrepreneurs, some of them f~~ield of restructuring, insolvency and second chance is thus indispensable for a well-functioning single market in general and for a working Capital Markets Union in particular~~rom other countries, abuse insolvency rules or commit fraud against them. It is therefore important that the directive should treat honest entrepreneurs as a separate category in order to facilitate a second chance for them.

Amendment 51 #

Proposal for a directive
Recital 7

(7) Those differences lead to uneven conditions for access to credit and to uneven recovery rates in the Member States. A higher degree of harmonisation in the field of restructuring, insolvency and second chance for entrepreneurs and for consumers who are not entrepreneurs is thus indispensable for a well-functioning single market in general and for a working Capital Markets Union in particular.

Amendment 52 #

Proposal for a directive
Recital 7

(7) Those differences lead to uneven conditions for access to credit and to uneven recovery rates in the Member States. A higher degree of harmonisation in the field of restructuring, insolvency and second chance is thus indispensable for a well-functioning single market in general and for a working Capital Markets Union in particular, as well as for the viability of economic operations and therefore for the preservation and creation of jobs.

Amendment 53 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 8

Amendment 54 #

Proposal for a directive
Recital 8

(8) The additional risk-assessment and cross-border enforcement costs for creditors of over-indebted entrepreneurs who relocate to another Member State in order to obtain a second chance in a much shorter period of time should also be removed. The additional costs for entrepreneurs stemming from the need to relocate to another Member State in order to benefit from a second chance should also be reduced. This would likewise reduce the alarming costs for society of the spectacular rise in poverty and exclusion, as well as use of the black economy, resulting from unresolved over- indebtedness among individuals and families who daily face eviction or lack of access to basic goods and services, which generates a pocket of marginalisation that is not only unjust but also unproductive and counter-productive in terms of economic efficiency. Furthermore, the obstacles stemming from long disqualification orders linked to an entrepreneur's over- ~~indebtedness suppresses entrepreneurship~~indebtedness, or eviction and the cutting-off of supplies linked to the over-indebtedness of natural persons who are not entrepreneurs, suppresses entrepreneurship and fosters the unproductive exclusion of citizens, in a way that is not only unjust but also inefficient.

Amendment 55 #

Proposal for a directive
Recital 8

Amendment 56 #

Proposal for a directive
Recital 8 a (new)

(8a) It is widely recognised that any restructuring operation, in particular one of a major size and which generates a significant impact, should be accompanied by an explanation and justification to the stakeholders, covering the choice of the measures envisaged in relation to the objectives and to alternative options and respecting the full and appropriate involvement of workers' representatives at all levels, prepared in good time to enable stakeholders to prepare for consultations, before the company takes a decision1 a. __________________ 1a(P7_TA(2013)0005 Information and consultation of workers, anticipation and management of restructuring)

Amendment 57 #

Proposal for a directive
Recital 9

(9) The obstacles to the exercise of fundamental freedoms are not limited to purely cross-border situations. An increasingly interconnected single market - where goods, services, capital and workers circulate freely to the detriment of honest entrepreneurs – with an ever stronger digital dimension means that very few financial companies are purely national if all relevant elements are considered, such as their client base, supply chain, scope of activities, investor and capital base. Even purely national insolvencies may have an impact on the functioning of the single market through the so-called domino effect of insolvencies, whereby an enterprise's insolvency may trigger further insolvencies in the supply chain.

Amendment 58 #

Proposal for a directive
Recital 10

(10) Regulation (EU) 2015/848 of the European Parliament and of the Council62 deals with issues of jurisdiction, recognition and enforcement, applicable law and cooperation in cross-border insolvency proceedings as well as with the interconnection of insolvency registers. Its scope covers preventive procedures which promote the rescue of an economically viable debtor as well as procedures which give a second chance to entrepreneurs. However, Regulation (EU) 2015/848 does not tackle the discrepancies between those procedures in national law. Furthermore, an instrument limited to cross-border insolvencies only would not remove all obstacles to free movement, nor would it be feasible for fin~~vesto~~anciers to determine in advance the cross-border or domestic nature of the future potential financial difficulties of the debtor. ~~There is a need therefore to go beyond matters of judicial cooperation and to establish substantive minimum standards.~~ __________________ 62 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).

Amendment 59 #

Proposal for a directive
Recital 10

(10) Regulation (EU) 2015/848 of the European Parliament and of the Council62 deals with issues of jurisdiction, recognition and enforcement, applicable law and cooperation in cross-border insolvency proceedings as well as with the interconnection of insolvency registers. Its scope covers preventive procedures initiated by a public decision which promote the rescue of an economically viable debtor as well as procedures which give a second chance to entrepreneurs. However, Regulation (EU) 2015/848 does not tackle the discrepancies between those procedures in national law and does not concern confidential procedures. Furthermore, an instrument limited to cross-border insolvencies only would not remove all obstacles to free movement, nor would it be feasible for investors to determine in advance the cross-border or domestic nature of the future potential financial difficulties of the debtor. There is a need therefore to go beyond matters of judicial cooperation and to establish substantive minimum standards. __________________ 62 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).

Amendment 60 #

Proposal for a directive
Recital 11

(11) It is necessary to lower the costs of restructuring for both debtors and creditors. Therefore the differences which hamper the early restructuring of viable enterprises in financial difficulties and the possibility of a second chance for honest entrepreneurs should be reduced. That should bring greater transparency, legal certainty and predictability in the Union. Also, it should maximise the returns to all types of creditors and investors and encourage cross-border investment. Greater coherence should also facilitate the restructuring of groups of companies irrespective of where the members of the group are located in the Unionsafeguard employment to the maximum.

Amendment 61 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 11

(11) It is necessary to lower the costs of restructuring for both debtors and creditors, who often bear those costs indirectly because of the reduction of their reimbursement. Therefore the differences which hamper the early restructuring of viable enterprises in financial difficulties and the possibility of a second chance for honest entrepreneurs should be reduced. That should bring greater transparency, legal certainty and predictability in the Union. Also, it should maximise the returns to all types of creditors and investors and encourage cross-border investment. Greater coherence should also facilitate the restructuring of groups of companies irrespective of where the members of the group are located in the Union.

Amendment 62 #

Proposal for a directive
Recital 11

(11) It is necessary to lower the costs of restructuring for both debtors and creditors. Therefore the differences which hamper the early restructuring of viable enterprises and productive and able citizens in financial difficulties, and the possibility of a second chance for honest entrepreneurs and consumers who are not entrepreneurs, should be reduced. That should bring greater transparency, legal certainty and predictability in the Union. Also, it should maximise the returns to all types of creditors and investors and encourage cross-border investment, as well as greater social cohesion across the Union, which should improve the resilience of European economies. Greater coherence should also facilitate the restructuring of groups of companies irrespective of where the members of the group are located in the Union.

Amendment 63 #

Proposal for a directive
Recital 11

(11) It is necessary to lower the costs of restructuring for both debtors and creditors. Therefore the differences which hamper the early restructuring of viable enterprises in financial difficulties and the possibility of a second chance for honest entrepreneurs should be reduced. That should bring greater transparency, legal certainty and predictability in the Union. Also, it should prioritise the protection of the workers concerned and their claims by ensuring absolute priority to their class claims, maximise the returns to all types of creditors and investors and encourage cross-border investment. Greater coherence should also facilitate the restructuring of groups of companies irrespective of where the members of the group are located in the Union.

Amendment 64 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 12

(12) Removing the barriers to effective restructuring of viable enterprises in financial difficulties contributes to minimising job losses, losses for creditors in the supply chain, preserves know-how and skills and hence benefits the wider economy. Facilitating a second chance for entrepreneurs avoids their exclusion from the labour market and enables them to restart entrepreneurial activities, drawing lessons from past experience. Finally, reducing the length of restructuring procedures would result in higher recovery rates for creditors as the passing of time would normally only result in a further loss of value for the enterprise. Moreover, efficient insolvency frameworks would enable a better assessment of the risks involved in lending and borrowing decisions and smooth the adjustment for over-indebted enterprises, minimizing the economic and social costs involved in their deleveraging process.deleted

Amendment 65 #

Proposal for a directive
Recital 12

(12) Removing the barriers to effective restructuring of viable enterprises and consumers who are not entrepreneurs in financial difficulties contributes to minimising job losses, losses for creditors in the supply chain, preserves know-how and skills, and ~~henc~~fosters a fairer and more egalitarian society for the benefits of the wider economy. Facilitating a second chance for entrepreneurs and for natural persons who are not entrepreneurs avoids their exclusion from the labour market and enables them to restart entrepreneurial a~~ctivities,~~nd economic activities, also avoiding their making use of the black economy while drawing lessons from past experience. Finally, reducing the length of restructuring procedures would result in higher recovery rates for creditors as the passing of time would normally only result in a further loss of value for the enterprise. Moreover, efficient insolvency frameworks would enable a better assessment of the risks involved in lending and borrowing decisions and smooth the adjustment for over-indebted enterprises, minimizing the economic and social costs involved in their deleveraging process.

Amendment 66 #

Proposal for a directive
Recital 12

(12) RIf well combined, removing the barriers to effective restructuring of viable enterprises in financial difficulties while protecting workers could contributes to minimising job losses, losses for creditors in the supply chain, preserves know-how and skills and hence benefits the wider economy. Facilitating a second chance for entrepreneurs avoids their exclusion from the labour market and enables them to restart entrepreneurial activities, drawing lessons from past experience. Finally, reducing the length of restructuring procedures would result in higher recovery rates for creditors as the passing of time would normally only result in a further loss of value for the enterprise. Moreover, efficient insolvency frameworks would enable a better assessment of the risks involved in lending and borrowing decisions and smooth the adjustment for over-indebted enterprises, minimizing the economic and social costs involved in their deleveraging process.

Amendment 67 #

Proposal for a directive
Recital 12

(12) Removing the barriers to effective restructuring of viable enterprises in financial difficulties contributes to minimising job losses, losses for creditors in the supply chain, preserves know-how and skills and hence benefits the wider economy. In order to attain that objective and to preserve employment and operations, it is necessary to enable these procedures to be conducted in whole or in part in a confidential framework, which in particular requires the rights of workers to be specified better. Facilitating a second chance for entrepreneurs avoids their exclusion from the labour market and enables them to restart entrepreneurial activities, drawing lessons from past experience. Finally, reducing the length of restructuring procedures would result in higher recovery rates for creditors as the passing of time would normally only result in a further loss of value for the enterprise. Moreover, efficient insolvency frameworks would enable a better assessment of the risks involved in lending and borrowing decisions and smooth the adjustment for over-indebted enterprises, minimizing the economic and social costs involved in their deleveraging process.

Amendment 68 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 13

(13) In particular small and medium sized enterprises should benefit from a ~~more~~ coherent approach at Union level, since they do not have the necessary resources to cope with high restructuring costs and to take advantage of the ~~more efficient~~ restructuring procedures in some Member States, which have proved to be efficient. Small and medium enterprises, especially when facing financial difficulties, often do not have the resources to hire professional advice, therefore early warning tools should be put in place to alert debtors to the urgency to act. In order to help such enterprises restructure at low cost, model restructuring plans should also be developed nationally and made available online. Debtors should be able to use and adapt them to their own needs and to the specificities of their business.

Amendment 69 #

Proposal for a directive
Recital 13

(13) In particular small and medium sized enterprises and consumers who are not entrepreneurs should benefit from a more coherent approach at Union level, since they do not have the necessary resources to cope with high restructuring costs and to take advantage of the more efficient restructuring procedures in some Member States. Small and medium enterprises, as well as consumers, especially when facing financial difficulties, often do not have the resources to hire professional advice, therefore early warning tools should be put in place to alert these debtors to the urgency to act. In order to help such enterprises and individuals restructure at low cost, model restructuring plans should also be developed nationally and made available online. Debtors should be able to use and adapt them to their own needs and to the specificities of their business or the nature of their indebtedness as consumers who are not entrepreneurs.

Amendment 70 #

Proposal for a directive
Recital 13

(13) In particular small and medium sized enterprises should benefit from a more coherent approach at Union level, since they do not have the necessary resources to cope with high restructuring costs and to take advantage of the more efficient restructuring procedures in some Member States. Small and medium enterprises, especially when facing financial difficulties, often do not have the resources to hire professional advice, therefore early warning tools should be put in place to alert debtors to the urgency to act. In order to help such enterprises restructure at low cost, mconfidential procedures which minimise loss of value, jobs and creditors’ dividends should be possible. Model restructuring plans should also be developed nationally and made available online. Debtors should be able to use and adapt them to their own needs and to the specificities of their business.

Amendment 71 #

Proposal for a directive
Recital 13

Amendment 72 #

Proposal for a directive
Recital 13

(13) In particular small and medium sized enterprises should benefit from a more coherent approach at Union level, since they do not have the necessary resources to cope with high restructuring costs and to take advantage of the more efficient restructuring procedures in some Member States. Small and medium enterprises, especially when facing financial difficulties, often do not have the resources to hire professional advice, therefore early warning tools should be put in place to alert debtors to the urgency to act. In order to help such enterprises restructure at low cost, model restructuring plans should also be developed nationally and made available online. Debtors should be able to use and adapt them to their own needs and to the specificities of their business. It should be possible for the debtor to find ad hoc and special solutions with third parties or creditors, either by reducing debts to all or most of the creditors or by surrendering whatever operations are viable, contributing to the satisfaction of creditors’ claims better than by means of the liquidation of assets, while preserving as many jobs as possible.

Amendment 73 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 13 a (new)

(13a) In order to secure a more coherent approach, the Commission is asked to consider setting up a single European journal recording insolvencies, which would provide greater transparency for all creditors and simplify access to information, in particular for small and medium-sized enterprises and for employees.

Amendment 74 #

Proposal for a directive
Recital 15

(15) Consumer over-indebtedness is a matter of great economic and social concern and is closely related to the reduction of debt overhang. Furthermore, it is often not possible to draw a clear distinction between the consumer and business debts of an entrepreneur. A second chance regime for entrepreneurs would not be effective if the entrepreneur had to go through separate procedures, with different access conditions and discharge periods, to discharge his business personal debts and his non-business personal debts. For these reasons, ~~although this Directive does not include binding rules on consumer over-indebtedness,~~ Member States should ~~be able to~~ also apply the discharge provisions to consumers who are not entrepreneurs.

Amendment 75 #

Proposal for a directive
Recital 16

(16) The earlier the debtor can detect its financial difficulties and can take appropriate action, the higher the probability of avoiding an impending insolvency or, in case of a business whose viability is permanently impaired, the more orderly and efficient the winding-up process. Clear information on the available preventive restructuring procedures as well as early warning tools should therefore be put in place to incentivise debtors who start to experience financial problems to take early action. Possible early warning mechanisms should include accounting and monitoring duties for the debtor or the debtor's management as well as reporting duties under loan agreements. In addition, ~~third parties with relevant information such as accountants, tax and social secur~~social security, competition and audity authorities cwould ~~be incentivised or obliged under national law to flag a negative development~~have sufficient means under domestic law tax to draw attention to any dangerous development at the earliest possible stage.

Amendment 76 #

Proposal for a directive
Recital 16

(16) The earlier the debtor and the workers concerned can detect ~~its~~companies' financial difficulties and can take appropriate action, the higher the probability of avoiding an impending insolvency or, in case of a business whose viability is permanently impaired, the more orderly and efficient the winding-up process. Clear information on the available preventive restructuring procedures as well as early warning tools should therefore be put in place to incentivise debtors who start to experience financial problems to take early action and to empower the workers concerned in order that they are able to take an active role in the restructuring process. Possible early warning mechanisms should include accounting and monitoring duties for the debtor or the debtor's management as well as reporting duties under loan agreements. In addition, third parties with relevant information such as accountants, tax and social security authorities could be incentivised or obliged under national law to flag a negative development.

Amendment 77 #

Proposal for a directive
Recital 17

(17) A restructuring framework should be available to debtors to enable them to address their financial difficulties at an early stage, when it appears likely that their insolvency may be prevented and the continuation of their business assured. A restructuring framework should be available before a debtor becomes insolvent according to national law, i.e. before the debtor fulfils the conditions for entering collective insolvency procedure which entail normally a total divestment of the debtor and the appointment of a liquidator. A test of viability should not therefore be made a pre-condition for entering negotiations and for granting a stay of enforcement actions. ~~Rather, the viability of an enterprise should most often be an assessment to be made by affected creditors who in their majority agree to some adjustments of their claims.~~ However, in order to avoid the procedures being misused, the financial difficulties of the debtor should reflect a likelihood of insolvency and the restructuring plan should be capable of preventing the insolvency of the honest debtor and ensuring the viability of the business.

Amendment 78 #

Proposal for a directive
Recital 18

(18) To promote efficiency and reduce delays and costs, national preventive restructuring frameworks should include flexible procedures limiting the involvement of judicial or administrative authorities to where it is necessary and proportionate in order to safeguard the interests of creditors and other interested parties likely to be affected. To avoid unnecessary costs and reflect the early nature of the procedure, debtors should in principle be left in control of their assets and the day-to-day operation of their business. The appointment of a restructuring practitioner, whether a mediator supporting the negotiations of a restructuring plan or an insolvency practitioner supervising the actions of the debtor, should not be mandatory in every case, but made on a case-by-case basis depending on the circumstances of the case or on the debtor's specific needs. Furthermore, there should not necessarily be a court order for the opening of the restructuring process which may be informal as long as the rights of third parties are not affected. Nevertheless, aA degree of supervision should be ensured when this is necessary to safeguard the legitimate interests of one or more creditors or another interested party. This may be the case, in particular, when a general stay of individual enforcement actions is granted by the judicial or administrative authority or where it appears necessary to impose a restructuring plan on dissenting classes of creditors.

Amendment 79 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 18

(18) To promote efficiency and reduce delays and costs, national preventive restructuring frameworks should include flexible procedures limiting the involvement of judicial or administrative authorities to where it is necessary and proportionate in order to safeguard the interests of creditors and other interested parties likely to be affected. To avoid unnecessary costs and reflect the early nature of the procedure, debtors should in principle be left in control of their assets and the day-to-day operation of their business. The appointment of a restructuring practitioner, whether a mediator supporting the negotiations of a restructuring plan or an insolvency practitioner supervising the actions of the debtor, should not be mandatory in every case, but made on a case-by-case basis depending on the circumstances of the case or on the debtor's specific needs. Furthermore, there should not necessarily be a court order for the opening of the restructuring process which may be informal as long as the rights of third parties are not affected. Nevertheless, a degree of supervision should be ensured when this is necessary to safeguard the legitimate interests of ~~one or more creditors or another interested party~~the entrepreneur, of workers or of a creditor supplier who meets the definition of ‘small or medium- sized enterprise’. This may be the case, in particular, when a general stay of individual enforcement actions is granted by the judicial or administrative authority or where it appears necessary to impose a restructuring plan on dissenting classes of creditors.

Amendment 80 #

Proposal for a directive
Recital 18

(18) To promote efficiency and reduce delays and costs, national preventive restructuring frameworks should include flexible procedures limiting the involvement of judicial or administrative authorities to where it is necessary and proportionate in order to safeguard the interests of creditors and other interested parties likely to be affected. To avoid unnecessary costs and reflect the early nature of the procedure, debtors should in principle be left in control of their assets or property and the day-to-day operation of their business or, as appropriate, access to minimum services and goods that guarantee that they can live a decent life. The appointment of a restructuring practitioner, whether a mediator supporting the negotiations of a restructuring plan or an insolvency practitioner supervising the actions of the debtor, should not be mandatory in every case, but made on a case-by-case basis depending on the circumstances of the case or on the debtor's specific needs. Furthermore, there should not necessarily be a court order for the opening of the restructuring process which may be informal as long as the rights of third parties are not affected. Nevertheless, a degree of supervision should be ensured when this is necessary to safeguard the legitimate interests of one or more creditors or another interested party. This may be the case, in particular, when a general stay of individual enforcement actions is granted by the judicial or administrative authority or where it appears necessary to impose a restructuring plan on dissenting classes of creditors.

Amendment 81 #

Proposal for a directive
Recital 18

(18) To promote efficiency and reduce delays and costs, national preventive restructuring frameworks should include flexible procedures limiting the involvement of judicial or administrative authorities to where it is necessary and proportionate in order to safeguard the interests of creditors and other interested parties likely to be affected. To avoid unnecessary costs and reflect the early nature of the procedure, debtors should in principle be left in control of their assets and the day-to-day operation of their business. The appointment of a restructuring practitioner, whether a mediator supporting the negotiations of a restructuring plan or an insolvency practitioner supervising the actions of the debtor, should not be mandatory in every case, but made on a case-by-case basis depending on the circumstances of the case or on the debtor's specific needs. Furthermore, there should not necessarily be a court order for the opening of the restructuring process which may be informal as long as the rights of third parties are not affected. Nevertheless, a degree of supervision should be ensured when this is necessary to safeguard the legitimate interests of one or more creditors or another interested party. This may be the case, in particular, when a general stay of individual enforcement actions is granted by the judicial or administrative authority or where it appears necessary to impose a restructuring plan on dissenting classes of creditors or if all or part of the business is transferred to another undertaking.

Amendment 82 #

Proposal for a directive
Recital 19

(19) A debtor should be able to request the judicial or administrative authority for a temporary stay of individual enforcement actions which should also suspend the obligation to file for opening of insolvency procedures where such actions may adversely affect negotiations and hamper the prospects of a restructuring of the debtor's business. The stay of enforcement could be general, that is to say affecting all creditors, or targeted towards individual creditors. In order to provide for a fair balance between the rights of the debtor and of creditors, the stay should be granted for a period of no more than four months. Complex restructurings may, however, require more time. Member States may decide that in such cases, extensions of this period may be granted by the judicial or administrative authority, providing there is evidence that negotiations on the restructuring plan are progressing and that creditors are not unfairly prejudiced. If further extensions are granted, the judicial or administrative authority should be satisfied that there is a strong likelihood that a restructuring plan will be adopted. Member States should ensure that any request to extend the initial duration of the stay is made within a reasonable deadline so as to allow the judiciary or administrative authorities to deliver a decision within due time. Where a judicial or administrative authority does not take a decision on the extension of a stay of enforcement before it lapses, the stay should cease to have effects on the day the stay period expires. In the interest of legal certainty, the total period of the stay should be limited to twelve months.deleted

Amendment 83 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 19

(19) A debtor should be able to request the judicial or administrative authority for a temporary stay of individual enforcement actions which should also suspend the obligation to file for opening of insolvency procedures where such actions may adversely affect negotiations and hamper the prospects of a restructuring of the debtor's business. The stay of enforcement cshould not be general, that is to say affecting all creditors, ~~or targeted towards individual creditors~~as the workers, as a class, should be ensured absolute priority. In order to provide for a fair balance between the rights of the debtor and of creditors, the stay should be granted for a period of no more than four months. Complex restructurings may, however, require more time. Member States may decide that in such cases, extensions of this period may be granted by the judicial or administrative authority, providing there is evidence that negotiations on the restructuring plan are progressing and that creditors are not unfairly prejudiced. If further extensions are granted, the judicial or administrative authority should be satisfied that there is a strong likelihood that a restructuring plan will be adopted. Member States should ensure that any request to extend the initial duration of the stay is made within a reasonable deadline so as to allow the judiciary or administrative authorities to deliver a decision within due time. Where a judicial or administrative authority does not take a decision on the extension of a stay of enforcement before it lapses, the stay should cease to have effects on the day the stay period expires. In the interest of legal certainty, the total period of the stay should be limited to twelve months.

Amendment 84 #

Proposal for a directive
Recital 19

(19) A debtor should be able to request the judicial or administrative authority for a temporary stay of individual enforcement actions which should also suspend the obligation to file for opening of insolvency procedures where such actions may adversely affect negotiations and hamper the prospects of a restructuring of the debtor's business or, as appropriate, may affect access to minimum goods and services that are necessary to be able to live a decent life. The stay of enforcement could be general, that is to say affecting all creditors, or targeted towards individual creditors. In order to provide for a fair balance between the rights of the debtor and of creditors, the stay should be granted for a period of no more than four months. Complex restructurings may, however, require more time. Member States may decide that in such cases, extensions of this period may be granted by the judicial or administrative authority, providing there is evidence that negotiations on the restructuring plan are progressing and that creditors are not unfairly prejudiced. If further extensions are granted, the judicial or administrative authority should be satisfied that there is a strong likelihood that a restructuring plan will be adopted. Member States should ensure that any request to extend the initial duration of the stay is made within a reasonable deadline so as to allow the judiciary or administrative authorities to deliver a decision within due time. Where a judicial or administrative authority does not take a decision on the extension of a stay of enforcement before it lapses, the stay should cease to have effects on the day the stay period expires. In the interest of legal certainty, the total period of the stay should be limited to twelve months.

Amendment 85 #

Proposal for a directive
Recital 20

(20) To ensure that the creditors do not suffer detriment, the stay should not be granted or, if granted, should not be prolonged or should be lifted when creditors are unfairly prejudiced by the stay of enforcement. In establishing whether there is unfair prejudice to creditors, judicial or administrative authorities may take into account whether the stay would preserve the overall value of the estate, whether the debtor acts in bad faith or with the intention of causing prejudice or generally acts against the legitimate expectations of the general body of creditors. A single creditor or a class of creditors would be unfairly prejudiced by the stay if for example their claims would be made substantially worse-off as a result of the stay than if the stay was not granted, or if the creditor is put more at a disadvantage than other creditors in a similar position.deleted

Amendment 86 #

Proposal for a directive
Recital 20

(20) To ~~ensure that the~~prevent the domino effect caused by certain bankruptcies of enterprises with 50 employees or fewer, it is important to ensure that priority creditors do not suffer detriment~~, t~~. The stay should not be granted or, if granted, should not be prolonged or should be lifted when priority creditors are unfairly prejudiced by the stay of enforcement. In establishing whether there is unfair prejudice to priority creditors, judicial or administrative authorities may take into account whether the stay would preserve the overall value of the estate, whether the debtor acts in bad faith or with the intention of causing prejudice or generally acts against the legitimate expectations of the general body of creditors. A single priority creditor or a class of creditors would be unfairly prejudiced by the stay if for example their claims would be made substantially worse- off as a result of the stay than if the stay was not granted, or if the creditor is put more at a disadvantage than other creditors in a similar position.

Amendment 87 #

Proposal for a directive
Recital 20

(20) To ensure that the creditors do not suffer detriment, the stay should not be granted or, if granted, should not be prolonged or should be lifted when creditors are unfairly prejudiced by the stay of enforcement. In establishing whether there is unfair prejudice to creditors, judicial or administrative authorities may take into account whether the stay would preserve the overall value of the estate as it could be realised by means of liquidation or would preserve the dividend creditors would receive, whether the debtor acts in bad faith or with the intention of causing prejudice or generally acts against the legitimate expectations of the general body of creditors. A single creditor or a class of creditors would be unfairly prejudiced by the stay if for example their claims would be made substantially worse-off as a result of the stay than if the stay was not granted, or if the creditor is put more at a disadvantage than other creditors in a similar position.

Amendment 88 #

Proposal for a directive
Recital 21

(21) Creditors to which the stay applies should also not be allowed to withhold performance, terminate, accelerate or in any other way modify executory contracts during the stay period, provided the debtor continues to comply with its existing obligations under such contracts. Early termination would endanger the ability of the business to continue operating during restructuring negotiations, especially when it concerns contracts for essential supplies such as gas, electricity, water, telecoms and card payment services. However, in order to protect the legitimate interests of creditors and to ensure the least disruption to the operation of creditors in the supply chain, the stay should only apply in respect of the claims which arose before the stay was granted. In order to achieve a successful restructuring, the debtor should pay in the ordinary course of business claims of and owed to creditors unaffected by the stay and the claims of creditors affected by the stay that arise after the stay is granted.deleted

Amendment 89 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 21

(21) Creditors to which the stay applies should also not be allowed to withhold performance, terminate, accelerate or in any other way modify executory contracts during the stay period, provided the debtor continues to comply with its existing obligations under such contracts. Early termination would endanger the ability of the business to continue operating during restructuring negotiations, especially when it concerns contracts for essential supplies such as gas, electricity, water, telecoms and card payment services. However, in order to protect the legitimate interests of creditors and to ensure the least disruption to the operation of creditors in the supply chain, the stay should only apply in respect of the claims which arose before the stay was granted. In order to achieve a successful restructuring, the debtor should pay in the ordinary course of business claims of and owed to priority creditors unaffected by the stay and the claims of creditors affected by the stay that arise after the stay is granted.

Amendment 90 #

Proposal for a directive
Recital 21

(21) Creditors to which the stay applies should also not be allowed to withhold performance, terminate, accelerate or in any other way modify executory contracts during the stay period, provided the debtor continues to comply with its existing obligations under such contracts. Early termination would endanger the ability of the business to continue operating during restructuring negotiations or that of individual consumers and users to continue to have access to minimum goods and services that are necessary to be able to live a decent life, especially when it concerns contracts for essential supplies such as gas, electricity, water, telecoms and card payment services or access to premises or their habitual home, as appropriate. However, in order to protect the legitimate interests of creditors and to ensure the least disruption to the operation of creditors in the supply chain, the stay should only apply in respect of the claims which arose before the stay was granted. In order to achieve a successful restructuring, the debtor should pay in the ordinary course of business claims of and owed to creditors unaffected by the stay and the claims of creditors affected by the stay that arise after the stay is granted.

Amendment 91 #

Javi LÓPEZ, Sergio GUTIÉRREZ PRIETO, Soledad CABEZÓN RUIZ

Proposal for a directive
Recital 22

(22) When a debtor enters an insolvency procedure, some suppliers may have contractual rights entitling them to terminate the supply contract solely on account of the insolvency (known as ipso facto clauses). The same may be true when a debtor applies for preventive restructuring measures. Where such clauses are invoked when the debtor is merely negotiating a restructuring plan or requesting a stay of enforcement or in connection with any event connected with the stay, early termination may have a negative impact on the debtor's business and the successful rescue of the business. Therefore, when the stay is granted by a judicial or administrative authority, it is necessary that creditors to which the stay applies are not allowed to invoke ipso facto clauses which make reference to negotiations on a restructuring plan or a stay or any similar event connected to the stay.deleted

Amendment 92 #

Proposal for a directive
Recital 22

(22) When a debtor enters an insolvency procedure, some suppliers may have contractual rights entitling them to terminate the supply contract solely on account of the insolvency (known as ipso facto clauses). The same may be true when a debtor applies for preventive restructuring measures. Where such clauses are invoked when the debtor is merely negotiating a restructuring plan or requesting a stay of enforcement or in connection with any event connected with the stay, early termination may have a negative impact on the debtor's business and the successful rescue of the business or on the decent living conditions to which any citizen is entitled. Therefore, when the stay is granted by a judicial or administrative authority, it is necessary that creditors to which the stay applies are not allowed to invoke ipso facto clauses which make reference to negotiations on a restructuring plan or a stay or any similar event connected to the stay.

Amendment 93 #

Proposal for a directive
Recital 23

(23) Creditors should have the right to challenge the stay once it has been granted by a judicial or administrative authority. When the stay is no longer necessary with a view to facilitating the adoption of a restructuring plan, for example because it is clear that there is a lack of support for the restructuring from a majority of creditors as required by national law, creditors should also be able to ask that stay be lifted.deleted

Amendment 94 #

Proposal for a directive
Recital 23

(23) Creditors should have the right to challenge the stay once it has been granted by a judicial or administrative authority, for example by providing information demonstrating the probability of misconduct on the part of a dishonest entrepreneur. When the stay is no longer necessary with a view to facilitating the adoption of a restructuring plan, for example because it is clear that there is a lack of support for the restructuring from a majority of creditors as required by national law, creditors should also be able to ask that stay be lifted.

Amendment 95 #

Proposal for a directive
Recital 24

(24) Any ~~creditor~~parties affected by the restructuring plan and, where allowed under national law, equity-holders should have a right to vote on the adoption of a restructuring plan. Parties unaffected by the restructuring plan should have no voting rights in relation to the plan, nor should their support be required for the approval of any plan. The vote can take the form of a formal voting process or of a consultation and agreement with the required majority of affected parties. However, where the vote takes the form of a consultation and agreement, affected parties whose agreement was not necessary should nevertheless be offered the possibility to join the restructuring plan.

Amendment 96 #

Proposal for a directive
Recital 25

(25) To ensure that rights which are substantially similar are treated equitably and that restructuring plans can be adopted without unfairly prejudicing the rights of affected parties, affected parties should be treated in separate classes which reflect the class formation criteria under national law. As a minimum, secured and unsecured creditors should always be treated in separate classes. National law may provide that secured claims may be divided into secured and unsecured claims based on collateral valuation. National law may also stipulate specific rules supporting class formation where non-diversified or otherwise especially vulnerable creditors, such as workers or small suppliers, would benefit from such class formation. Workers should, at all events, be given preferential treatment. In order to prevent chain bankruptcies, suppliers/clients with fewer than 50 employees should be treated as a priority class of creditors when activities essential to their survival are at stake. National laws should in any case ensure that adequate treatment is given to matters of particular importance for class formation purposes, such as claims from connected parties, and should contain rules that deal with contingent claims and contested claims. The judicial or administrative authority should examine class formation when a restructuring plan is submitted for confirmation, but Member States could stipulate that such authorities may also examine class formation at an earlier stage should the proposer of the plan seek validation or guidance in advance.

Amendment 97 #

Edouard MARTIN, Jutta STEINRUCK, Agnes JONGERIUS, Sergio GUTIÉRREZ PRIETO, Javi LÓPEZ, Elena GENTILE, Maria ARENA

Proposal for a directive
Recital 25

(25) To ensure that rights which are substantially similar are treated equitably and that restructuring plans can be adopted without unfairly prejudicing the rights of affected parties, affected parties should be treated in separate classes which reflect the class formation criteria under national law. As a minimum, secured and unsecured creditors should always be treated in separate classes. National law may provide that secured claims may be divided into secured and unsecured claims based on collateral valuation. National law may also stipulate specific rules supporting class formation where non-diversified or otherwise especially vulnerable creditors, such as workers or small suppliers, would benefit from such class formation. Workers should, at all events, be given preferential treatment and special consideration as potential buyers. National laws should in any case ensure that adequate treatment is given to matters of particular importance for class formation purposes, such as claims from connected parties, and should contain rules that deal with contingent claims and contested claims. The judicial or administrative authority should examine class formation when a restructuring plan is submitted for confirmation, but Member States could stipulate that such authorities may also examine class formation at an earlier stage should the proposer of the plan seek validation or guidance in advance.

Amendment 98 #

Proposal for a directive
Recital 26

(26) Requisite majorities should be established by national law to ensure that a minority of affected parties in each class cannot obstruct the adoption of restructuring plan which does not unfairly reduce their rights and interests. Without a majority rule binding dissenting secured creditors, early restructuring would not be possible in many cases, for example where a financial restructuring is needed but the business is otherwise viable. To ensure that parties have a say on the adoption of restructuring plans proportionate to the stakes they have in the business, the required majority should be based on the amount of the creditors' claims or equity holders' interests in any given clasTo ensure that parties have a say on the adoption of restructuring plans proportionate to the stakes they have in the business, the required majority should be based on the degree of importance of the claim to the survival of the creditor’s business and then on the size of that claim or stake as a percentage of all the other claims and stakes which the creditor holds.

Amendment 99 #

Proposal for a directive
Recital 26

(26) Requisite majorities should be established by national law to ensure that a minority of affected parties in each class cannot obstruct the adoption of restructuring plan which does not unfairly reduce their rights and interests. Without a majority rule binding dissenting secured creditors, early restructuring would not be possible in many cases, for example where a financial restructuring is needed but the business is otherwise viable. To ensure that parties have a say on the adoption of restructuring plans proportionate to the stakes they have in the business, the ~~required~~ majority should be based both on the ~~amount~~number of creditor class members with voting rights and on the majority of the total volume of the creditors' claims or equity holders' interests in any given class.

source: 603.080

2017/09/19 ECON 238 amendments...

Amendment 100 #

Proposal for a directive
Recital 29

(29) While shareholders' or other equity holders' legitimate interests should be protected, Member States should ensure that shareholders cannot unreasonably block the adoption of restructuring plans which would bring the debtor back to viability or enable the viable parts of its business to be continued by another enterprise after its transfer. For example, the adoption of a restructuring plan should not be conditional on the agreement of the out-of-the-money equity holders, namely equity holders who, upon a valuation of the enterprise, would not receive any payment or other consideration if the normal ranking of liquidation priorities were applied. Member States can deploy different means to achieve this goal, for example by not giving equity holders the right to vote on a restructuring plan. However, where equity holders have the right to vote on a restructuring plan, a judicial or administrative authority should be able to confirm the plan notwithstanding the dissent of one or more classes of equity holders, through a cross-class cram down mechanism. More classes of equity holders may be needed where different classes of shareholdings with different rights exist. Equity holders of small and medium enterprises who are not mere investors but are the owners of the firm and contribute to the firm in other ways such as managerial expertise may not have an incentive to restructure under such conditions. For this reason, the cross-class cram-down mechanism should remain optional for the plan proposer.

Amendment 101 #

Proposal for a directive
Recital 29 a (new)

(29a) For the purposes of implementing the restructuring plan, the latter should make it possible for holders of equity in small and medium-sized enterprises to provide non-monetary restructuring assistance (drawing, for example, on their experience, reputation or business contacts).

Amendment 102 #

Proposal for a directive
Recital 30

(30) Confirmation of a restructuring plan by a judicial or administrative authority is necessary to ensure that the reduction of the rights of creditors or interests of equity holders is proportionate to the benefits of the restructuring and that they have access to an effective remedy or that the transfer of the business is carried out under conditions which ensure that creditors receive at least as much as they would have been allocated after the sale of assets following a liquidation. The judicial or administrative authority should therefore reject a plan or proposed transfer where it has been established that the attempted restructuring reduces the rights of dissenting creditors or equity holders below what they could reasonably expect to receive in the event of the liquidation of the debtor's business, either by piecemeal liquidation or by a sale as a going concern, depending on the particular circumstances of each debtor. However, where the plan is confirmed through a cross-class cram- down mechanism, the absolute priority rule should be applied by reference to the enterprise valuation which, as opposed to the going-concern liquidation valuation of the enterprise, looks at the value of the debtor's business in the longer term. The enterprise valuation is, as a rule, higher than the going-concern liquidation value because it captures the fact that the business continues its activity and contracts with the minimum disruption, has the confidence of financial creditors, shareholders and clients, continues to generate revenues and limits the impact on workers.

Amendment 103 #

Proposal for a directive
Recital 32

Amendment 104 #

Proposal for a directive
Recital 33 a (new)

(33a) Workers and their representatives should be provided with all the documents and information regarding the proposed restructuring so as to allow them to undertake an in-depth assessment of the various scenarios and prepare adequately for possible consultations. Workers and their representatives must also be actively involved during the consultation and approval phases of the plan and given guaranteed access to expert advice in connection with the restructuring.

Amendment 105 #

Proposal for a directive
Recital 34

(34) Throughout the preventive restructuring procedures, workers should enjoy full labour law protection. I~~n particular,~~f this Directive is without prejudice to workers' rights guaranteed by Council Directive 98/59/EC68, Council Directive 2001/23/EC69, Directive 2002/14EC of the European Parliament and of the Council70, Directive 2008/94/EC of the European Parliament and of the Council71 and Directive 2009/38/EC of the European Parliament and of the Council72, it shall lay down arrangements for the exercise of these rights which make it possible to safeguard jobs and economic activity, in particular the confidentiality necessary for that purpose, whilst guaranteeing the effective exercise of those rights. The obligations concerning the information and consultation of workers under national law implementing the above-mentioned Directives remain fully intact. This includes obligations to inform and consult workers' representatives on the decision to have recourse to a preventive restructuring framework in accordance with Directive 2002/14/EC. Given the need to ensure an appropriate level of protection of workers, Member States should in principle exempt workers' outstanding claims, as defined in Directive 2008/94/EC, from any stay of enforcement irrespective of the question whether these claims arise before or after the stay is granted. Such a stay should be permissible only for the amounts and for the period that the payment of such claims is effectively guaranteed by other means under national law. Where Member States extend the cover of the guarantee of payment of workers' outstanding claims established by Directive 2008/94/EC to preventive restructuring procedures set up by this Directive, the exemption of workers' claims from the stay of enforcement is no longer justified to the extent covered by that guarantee. Where under national law there are limitations to the liability of guarantee institutions, either in terms of the length of the guarantee or the amount paid to workers, workers should be able to enforce their claims for any shortfall against the employer even during the stay of enforcement period. _________________ 68 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, 12.08.1998, p. 16. 69 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, 22.03.2001, p. 16. 70 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. 71 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. 72 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 purpose of informing and consulting employees, OJ L 122, 16.5.2009, p.28.

Amendment 106 #

Proposal for a directive
Recital 35

(35) Where a restructuring plan entails a transfer of part of undertaking or business, workers' rights arising from a contract of employment or from an employment relationship, notably including the right to wages, should be safeguarded in accordance with Articles 3 and 4 of Directive 2001/23/EC, without prejudice to the specific rules applying in the event of insolvency proceedings under Article 5 of that Directive and in particular the possibilities allowed by Article 5(2) of that Directive. Furthermore, in addition and without prejudice to the rights to information and consultation, including on decisions likely to lead to substantial changes in work organisation or in contractual relations with a view to reaching an agreement on such decisions, which are guaranteed by Directive 2002/14/EC, under this Directive workers who are affected by the restructuring plan should have the right to vote on the plan. For the purposes of voting on the restructuring plan, Member States may decide to place workers in a class separate from other classes of creditors. Due account should be taken of the rulings handed down by the Court of Justice, as Advocate-General Mengozzi recently pointed out in his conclusions in Case C- 126/16.

Amendment 107 #

Proposal for a directive
Recital 37

(37) The different second chance possibilities in the Member States may incentivise over-indebted entrepreneurs to relocate to Member States in order to benefit from shorter discharge periods or more attractive conditions for discharge, leading to additional legal uncertainty and costs for the creditors when recovering their claims. Furthermore, the effects of bankruptcy, in particular the social stigma, legal consequences such as disqualifying entrepreneurs from taking up and pursuing entrepreneurial activity and the on-going inability to pay off debts constitute important disincentives for entrepreneurs seeking to set up a business or have a second chance, even if evidence shows that entrepreneurs who have gone bankrupt have more chance to be successful the second time. Steps should therefore be taken to reduce the negative effects of over-indebtedness and bankruptcy on entrepreneurs, in particular by allowing for a full discharge of debts after a certain period of time and by limiting the length of disqualification orders issued in connection with the debtor's over-indebtedness. In addition, Member States should ensure that second chance entrepreneurs have access to up-to-date information about the availability of administrative, legal, business or financial support tailored to them and any means available to them to facilitate the set-up of a new business.

Amendment 108 #

Proposal for a directive
Recital 37

Amendment 109 #

Proposal for a directive
Recital 37

(37) The different second chance possibilities in the Member States may incentivise over-indebted entrepreneurs to relocate to Member States in order to benefit from shorter discharge periods or more attractive conditions for discharge, leading to additional legal uncertainty and costs for the creditors when recovering their claims. Furthermore, the effects of bankruptcy, in particular the social stigma, legal consequences such as disqualifying entrepreneurs from taking up and pursuing entrepreneurial activity and the on-going inability to pay off debts constitute important disincentives for entrepreneurs seeking to set up a business or have a second chance, even if evidence shows that entrepreneurs who have gone bankrupt have more chance to be successful the second time. Steps should therefore be taken to reduce the negative effects of over-indebtedness and bankruptcy on entrepreneurs, and to incentivise entrepreneurs to take up new business activities more quickly, in particular by allowing for a full discharge of debts after a certain period of time and by limiting the length of disqualification orders issued in connection with the debtor's over- indebtedness.

Amendment 110 #

Proposal for a directive
Recital 39

(39) It is necessary to maintain and enhance the transparency and predictability of the procedures in delivering outcomes that are favourable for the preservation of businesses and for giving entrepreneurs a second chance or that permit the efficient liquidation of non-viable enterprises. It is also necessary to reduce the excessive length of insolvency procedures in many Member States, which results in legal uncertainty for creditors and investors and low recovery rates. That reduction may in particular be secured by introducing, as a first step, confidential procedures which make it possible, in part by virtue of that confidentiality, to prepare the plan or the assignment without the loss of value which would occur if that intention were to be made public. Finally, given the enhanced cooperation mechanisms between courts and practitioners in cross- border cases set up by Regulation (EU) 2015/848 and applicable to public procedures, the professionalism of all actors involved needs to be brought to comparable high levels across the Union. To achieve these objectives, Member States should ensure that members of the judicial and administrative bodies are properly trained and have specialised knowledge and experience in insolvency matters. Such specialisation of members of the judiciary should allow making decisions with potentially significant economic and social impacts within a short period of time and should not mean that members of the judiciary have to deal exclusively with restructuring, insolvency and second chance matters. For example, the creation of specialised courts or chambers in accordance with national law governing the organisation of the judicial system could be an efficient way of achieving these objectives.

Amendment 111 #

Proposal for a directive
Recital 39

(39) It is necessary to maintain and enhance the transparency and predictability of the procedures in delivering outcomes that are favourable for the preservation of businesses and for giving entrepreneurs a second chance or that permit the efficient liquidation of non-viable enterprises. Enhanced transparency and predictability would also ensure greater legal certainty for investors and creditors involved in the restructuring, insolvency and discharge procedures. It is also necessary to reduce the excessive length of insolvency procedures in many Member States, which results in legal uncertainty for creditors and investors and low recovery rates. Finally, given the enhanced cooperation mechanisms between courts and practitioners in cross- border cases set up by Regulation (EU) 2015/848, the professionalism of all actors involved needs to be brought to comparable high levels across the Union. To achieve these objectives, Member States should ensure that members of the judicial and administrative bodies are properly trained and have specialised knowledge and experience in insolvency matters. Such specialisation of members of the judiciary should allow making decisions with potentially significant economic and social impacts within a short period of time and should not mean that members of the judiciary have to deal exclusively with restructuring, insolvency and second chance matters. For example, the creation of specialised courts or chambers in accordance with national law governing the organisation of the judicial system could be an efficient way of achieving these objectives.

Amendment 112 #

Proposal for a directive
Recital 40

(40) Member States should also ensure that the practitioners in the field of restructuring, insolvency and second chance which are appointed by judicial or administrative authorities are properly trained and supervised in the carrying out of their tasks, that they are appointed in a transparent manner with due regard to the need to ensure efficient procedures and that they perform their tasks, whether these entail restructuring or liquidation, with integrity. Practitioners should also adhere to voluntary codes of conduct aiming at ensuring an appropriate level of qualification and training, transparency of the duties of such practitioners and the rules for determining their remuneration, the taking up of professional indemnity insurance cover and the establishment of oversight and regulatory mechanisms which should include an appropriate and effective regime for sanctioning those who have failed in their duties. Such standards may be attained without the need in principle to create new professions or qualifications.

Amendment 113 #

Proposal for a directive
Recital 40

(40) Member States should also ensure that the practitioners in the field of restructuring, insolvency and second chance which are appointed by judicial or administrative authorities have sufficient expertise and are properly ~~trained and~~ supervised in the carrying out of their tasks, that they are appointed in a transparent manner with due regard to the need to ensure efficient procedures and that they perform their tasks with integrity. Practitioners should also adhere to voluntary codes of conduct aiming at ensuring an appropriate level of qualification and training, transparency of the duties of such practitioners and the rules for determining their remuneration, the taking up of professional indemnity insurance cover and the establishment of oversight and regulatory mechanisms which should include an appropriate and effective regime for sanctioning those who have failed in their duties. Such standards may be attained without the need in principle to create new professions or qualifications.

Amendment 114 #

Proposal for a directive
Recital 42

(42) It is important to gather reliable data on the performance of restructuring, insolvency and discharge procedures in order to monitor the implementation and application of this Directive. Therefore Member States should collect and aggregate data that is sufficiently granular to enable an accurate assessment of how the Directive works in practice. They should accordingly proceed to collect and analyse data by type of procedure so that reliable and usable comparative statistics can be obtained.

Amendment 115 #

Proposal for a directive
Recital 43

(43) The stability of financial markets relies heavily on financial collateral arrangements, in particular, when security collateral is provided in connection with participation in designated systems or in central bank operations and when margins are provided to central counterparties (CCPs). As the value of financial instruments given as security may be very volatile, it is crucial to realize their value quickly before its goes down. The~~refore, this Directive should be without prejudice to~~ provisions of Directive 98/26/EC of the European Parliament and of the Council of 19 May 199874 , Directive 2002/47/EC of the European Parliament and of the Council75 and Regulation (EU) No 648/201276 should prevail over this Directive. _________________ 74 Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (OJ L 166/45, 11.6.1998). 75 Directive 2002/47/EC of the European Parliament and of the Council of 6 June 2012 on financial collateral arrangements (OJ L 168/43, 27.6.2002). 76 Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories, (OJ L 201/1, 27.7.2012, p.1).

Amendment 116 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Recital 46 a (new)

(46a) Under no circumstances should workers bear the burden of restructuring, insolvency and discharge procedures, and the debts owing to them (such as unpaid wages) should always be recovered first. In order to guarantee the continuity of production and employment and to better fight tactical or fraudulent practices by management, workers should also be informed and consulted at the initial stage of restructuring, insolvency and discharge procedures.

Amendment 117 #

Proposal for a directive
Article 1 – paragraph 1 – point a

(a) preventive restructuring procedures available for debtors in financial difficulty when there is a likelihood of insolvency; or where the procedures are being used to resolve a short-term problem, to reduce the amount owed to all or some of the creditors or to transfer all or part of the viable business to another enterprise on the basis of arrangements which provide for creditors to receive a dividend at least equal to that which they would have received in the event of liquidation;

Amendment 118 #

Proposal for a directive
Article 1 – paragraph 1 – point a

(a) preventive restructuring procedures available for debtors in financial difficulty when there is a likelihood of insolvency. By means of delegated acts, the Commission shall further specify what constitutes a "likelihood of insolvency";

Amendment 119 #

(a) preventive restructuring procedures available for debtors in financial difficulty when there is a likelihood of insolvency, and a possibility of survival;

Amendment 120 #

Proposal for a directive
Article 1 – paragraph 2 – point g a (new)

(ga) a public body that does not engage in business activities

Amendment 121 #

Proposal for a directive
Article 1 – paragraph 3

~~3. Member States may extend the application of the procedures referred to in point (b) of paragraph 1 to over indebted natural persons who are not entrepreneurs.~~deleted

Amendment 122 #

Proposal for a directive
Article 1 – paragraph 3

~~3. Member States may extend the application of the procedures referred to in point (b) of paragraph 1 to over indebted natural persons who are not entrepreneurs.~~deleted

Amendment 123 #

Proposal for a directive
Article 2 – paragraph 1 – point 1

(1) 'insolvency procedure' means a collective insolvency procedure opened by means of a public decision which entails a partial or total divestment of the debtor and the appointment of a liquidator;

Amendment 124 #

Proposal for a directive
Article 2 – paragraph 1 – point 1

(1) 'insolvency procedure' means a collective ~~insolvency~~ procedure which entails a partial or total divestment of the debtor and the appointment of a liquidator;

Amendment 125 #

Proposal for a directive
Article 2 – paragraph 1 – point 2

Amendment 126 #

Proposal for a directive
Article 2 – paragraph 1 – point 2

(2) '‘restructuring'’ means changing the composition, conditions, or structure of a debtor's assets and liabilities or any other part of the debtor's capital structure, including share capital, or a combination of those elements, including sales of assets or parts of the business or the entire business, with the objective of enabling the enterprise to continue in whole or in part;

Amendment 127 #

Proposal for a directive
Article 2 – paragraph 1 – point 3

(3) 'affected parties' means creditors or classes of creditors, including contracting partners of executing contracts and, where applicable under national law, equity holders whose claims or interests are affected under a restructuring plan;

Amendment 128 #

Proposal for a directive
Article 2 – paragraph 1 – point 3

(3) 'affected parties' means creditors or classes of creditors, including public creditors and, where applicable under national law, equity holders whose claims or interests are affected under a restructuring plan;

Amendment 129 #

Proposal for a directive
Article 2 – paragraph 1 – point 5

(5) 'executory contracts' means contracts, excluding financial facilities such as undrawn credit facilities, revolving credit lines and offers for financing, between the debtor and one or more creditors under which both sides still have obligations to perform at the moment the stay of individual enforcement actions is ordered;

Amendment 130 #

Proposal for a directive
Article 2 – paragraph 1 – point 5

(5) 'executory contracts' means contracts between the debtor and one or more creditors under which ~~both sides~~at least one party still haves obligations to perform at the moment the stay of individual enforcement actions is ordered;

Amendment 131 #

Proposal for a directive
Article 2 – paragraph 1 – point 6

(6) 'class formation' means the grouping of affected creditors and equity holders in a restructuring plan in such a way as to reflect the rights and seniority of the affected claims and interests, taking into account possible pre-existing entitlements, liens or inter-creditor agreements, and their treatment under the restructuring plan. For the purpose of adopting a restructuring plan, creditors are divided into different classes of creditors, where as a minimum, secured and unsecured claims are treated in distinct classes, whilst workers constitute a separate class;

Amendment 132 #

Proposal for a directive
Article 2 – paragraph 1 – point 7

(7) 'cram-down of dissenting creditors' means the confirmation by a judicial or administrative authority of a restructuring plan that has the support of a majority in value of creditors or a majority in value in each and every class of creditors, or whose transfer price is not enough to pay all the creditors in full, over the dissent of a minority of creditors or the dissent of a minority of creditors within each class or the dissent of the creditors who do not receive full payment of their claims;

Amendment 133 #

Proposal for a directive
Article 2 – paragraph 1 – point 11

(11) 'new financing' means any new funds, whether provided by an existing or a new creditor, that are necessary to implement a restructuring plan that are agreed upon in that restructuring plan ~~and confirmed subsequently by a judicial or administrative authority;~~.

Amendment 134 #

Proposal for a directive
Article 2 – paragraph 1 – point 15 – introductory part

(15) 'practitioner in the field of restructuring' means any person or body ~~appointed by a judicial or administrative authority to carry~~that carries out one or more of the following tasks:

Amendment 135 #

Proposal for a directive
Article 2 – paragraph 1 – point 15 – point a

(a) to assist the debtor or the creditors in drafting or negotiating a restructuring or economically viable business transfer plan;

Amendment 136 #

Proposal for a directive
Article 2 – paragraph 1 – point 15 – point a

(a) to assist the debtor or the creditors in drafting or negotiating a restructuring plan or a plan to transfer viable parts of the business;

Amendment 137 #

Proposal for a directive
Article 2 – paragraph 1 – point 15 – point b

(b) to supervise the activity of the debtor during the negotiations on a restructuring plan and, when appointed by a judicial or administrative authority, to report to athe judicial or administrative authority;

Amendment 138 #

Proposal for a directive
Article 2 – paragraph 1 – point 15 – point b

(b) to supervise the activity of the debtor during the negotiations on a restructuring or transfer plan and report to a judicial or administrative authority;

Amendment 139 #

Proposal for a directive
Article 2 – paragraph 1 – point 15 – point b

(b) to supervise the activity of the debtor during the negotiations on a restructuring or transfer plan and report to a judicial or administrative authority;

Amendment 140 #

Proposal for a directive
Article 2 – paragraph 1 – point 15 – point c

(c) to take partial control over the assets or affairs of the debtor during negotiations., when appointed by a judicial or administrative authority;

Amendment 141 #

Proposal for a directive
Article 2 – paragraph 1 – point 15 a (new)

(15a) 'viable' means able to provide an appropriate projected return on capital after having covered all its costs including depreciation and financial charges.

Amendment 142 #

Proposal for a directive
Article 3 – paragraph 1

1. Member States shall ensure that debtors and entrepreneurs have access to early warning tools which can detect a deteriorating business development and signal to the debtor or the entrepreneur the need to act as a matter of urgency. In that regard, the Commission shall promote, as part of its digital single market strategy, the use and development of new IT technologies for notifications and online communications, to ensure more effective early warning procedures.

Amendment 143 #

Proposal for a directive
Article 3 – paragraph 2 a (new)

2a. The Commission shall: (a) issue a list of warning indicators, linked to set of actions to be performed by debtors and entrepreneurs in case these indicators are met; (b) centralise on their website the information laid down in paragraph 2 in a user-friendly way.

Amendment 144 #

Proposal for a directive
Article 3 – paragraph 2 a (new)

2a. Member States shall communicate to the Commission on a yearly basis the information to be provided under paragraph 2.

Amendment 145 #

Proposal for a directive
Article 3 – paragraph 2 b (new)

2b. The Commission shall publish the information to be provided under paragraph 2 and received according to paragraph 2a in a user-friendly way on its website.

Amendment 146 #

Proposal for a directive
Article 3 – paragraph 3

~~3. Member States may limit the access provided for in paragraphs 1 and 2 to small and medium sized enterprises or to entrepreneurs~~deleted

Amendment 147 #

Proposal for a directive
Article 3 – paragraph 3

3. ~~Member States may limit the access provided for in paragraphs 1 and 2 to~~For small and medium sized enterprises or entrepreneurs, Member States smhall ~~and medium sized enterprises or to entrepreneurs~~provide access to professional advice from a restructuring practitioner on a low cost basis.

Amendment 148 #

Proposal for a directive
Article 3 – paragraph 3

3. Member States may limit the access provided for in paragraphs 1 and 2 to ~~small and medium sized enterprises or to~~ entrepreneurs.

Amendment 149 #

Proposal for a directive
Article 3 – paragraph 3

3. ~~Member States may limit the access provided for in paragraphs 1 and 2 to sm~~For SME debtors, Member States shall provide access to professionall a~~nd medium sized enterprises or to entrepreneurs~~dvice on a low cost basis.

Amendment 150 #

Proposal for a directive
Article 3 – paragraph 3 a (new)

3a. Member States may ensure that accountants and tax authorities have sufficient legal or non-legal means to be able to flag to entrepreneurs any worrying developments concerning their business debts or the viability of their business as soon as possible.

Amendment 151 #

Proposal for a directive
Article 4 – paragraph 1

Amendment 152 #

Proposal for a directive
Article 4 – paragraph 1 a (new)

1a. Member States shall incentivise debtors in financial difficulty to take early action by providing clear information on the available preventive restructuring procedures and on the early warning tools.

Amendment 153 #

Proposal for a directive
Article 4 – paragraph 1 b (new)

1b. Member States shall require that debtors entering a preventive restructuring framework are not illiquid, and are viable.

Amendment 154 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 4 – paragraph 2

2. Preventive restructuring frameworks may consist of one or more procedures or measures, duly negotiated and consulted with workers’ representatives, who shall retain all rights of collective bargaining and industrial action. Preventive restructuring frameworks shall provide for procedures or measures destined to the recovery of the indebted firm by workers, in accordance with the relevant national law.

Amendment 155 #

Proposal for a directive
Article 4 – paragraph 2

2. Preventive restructuring frameworks may consist of one or more procedures or measures, either out-of- court or ordered by an administrative or judicial authority.

Amendment 156 #

Proposal for a directive
Article 4 – paragraph 2 a (new)

2a. Member States may predicate the access to the restructuring framework upon evidence of anticipated solvency for at least six months from the commencement of proceedings.

Amendment 157 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 4 – paragraph 3

3. Member States ~~shall~~may put in place provisions limiting the involvement of a judicial or administrative authority to where it is necessary and proportionate sowhile ensuring that rights of any affected parties are safeguarded.

Amendment 158 #

Proposal for a directive
Article 4 – paragraph 3

3. Member States shall ~~put in place provisions limiting~~ensure the involvement of a judicial or administrative authority to where it is necessary and proportionate so that rights of any affected parties are safeguarded.

Amendment 159 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 4 – paragraph 4

4. Preventive restructuring frameworks shall be available on the application by debtors, ~~or by~~by workers or by other creditors with the agreement of debtors.

Amendment 160 #

Proposal for a directive
Article 5 – paragraph 2

2. The appointment by a judicial or administrative authority of a practitioner in the field of restructuring shall not be mandatory in every case. Nevertheless, small and medium sized businesses and entrepreneurs shall have easy access to the professional advice of a practitioner in the field of restructuring on a low cost basis.

Amendment 161 #

Proposal for a directive
Article 5 – paragraph 2

2. TMember States may require the appointment by a judicial or administrative authority of a practitioner in the field of restructuring ~~shall not be mandatory in every case~~, if necessary and appropriate to safeguard the rights of affected parties.

Amendment 162 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 5 – paragraph 2

2. The appointment by a judicial or administrative authority of a practitioner in the field of restructuring shall ~~not~~ be mandatory in every case.

Amendment 163 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 5 – paragraph 3

3. Member States may require the appointment of a practitioner in the field of restructuring in the following cases: (a) general stay of individual enforcement actions in accordance with Article 6; (b) to be confirmed by a judicial or administrative authority by means of a cross-class cram-down, in accordance with Article 11.deleted where the debtor is granted a where the restructuring plan needs

Amendment 164 #

Proposal for a directive
Article 5 – paragraph 3 – introductory part

3. Member States may require the appointment by a judicial or administrative authority of a practitioner in the field of restructuring in the following cases:

Amendment 165 #

Proposal for a directive
Article 5 – paragraph 3 – introductory part

3. Member States ~~may requi~~shall ensure the appointment of a practitioner in the field of restructuring at least in the following cases:

Amendment 166 #

Proposal for a directive
Article 5 – paragraph 3 – introductory part

3. Member States ~~may requi~~shall ensure the appointment of a practitioner in the field of restructuring in the following cases:

Amendment 167 #

Proposal for a directive
Article 5 – paragraph 3 – point b a (new)

(ba) where the plan provides for the transfer of all or part of an undertaking to another undertaking without the creditors being paid in full or, indeed, the entire workforce being kept on.

Amendment 168 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 5 – paragraph 3 a (new)

Amendment 169 #

Neena GILL

Proposal for a directive
Article 5 a (new)

Article 5a Member States shall ensure that a creditors' committee shall be established. The committee shall include representatives of the main creditors and other stakeholders; it shall include a representative of the debtor’s employees, especially the representation by a responsible trade union. The members of the creditors' committee shall support and monitor the insolvency administrator's execution of his office. They shall demand information on the progress of business affairs, have the books and business documents inspected and the monetary transactions and the available cash verified.

Amendment 170 #

Proposal for a directive
Article 6 – paragraph 1

1. Member States shall ensure that debtors who are negotiating a restructuring plan with their creditors may benefit from a stay of individual enforcement actions if and to the extent such a stay is necessary to support the negotiations of a restructuring plan and if the debtor can demonstrate the ability to restructure, in order to justify that such a stay is necessary to allow the negotiation of a restructuring plan.

Amendment 171 #

Proposal for a directive
Article 6 – paragraph 1

1. Member States shall ensure that debtors who are negotiating a restructuring plan with their creditors or drawing up a sale plan may benefit from a stay of individual enforcement actions if and to the extent such a stay is necessary to support the negotiations of a restructuring plan.

Amendment 172 #

Proposal for a directive
Article 6 – paragraph 1 a (new)

1a. Member States shall require that debtors benefiting from a stay of individual enforcement actions are not illiquid, and are viable.

Amendment 173 #

Proposal for a directive
Article 6 – paragraph 2

2. Member States shall ensure that a stay of individual enforcement actions may be ordered in respect of ~~all types of~~the creditors, including secured and preferential creditors, involved in the negotiation of the restructuring plan. The stay may be general, covering all creditors, or limited, covering one or more individual creditors, in accordance with national law.

Amendment 174 #

Proposal for a directive
Article 6 – paragraph 3

Amendment 175 #

Amendment 176 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 6 – paragraph 3

Amendment 177 #

Neena GILL

Proposal for a directive
Article 6 – paragraph 3

Amendment 178 #

Proposal for a directive
Article 6 – paragraph 3

3. Paragraph 2 shall not apply to micro and small enterprise claims and workers' outstanding claims except if and to the extent that Member States ensure by other means that the payment of such claims is guaranteed at a level of protection at least equivalent to that provided for under the relevant national law transposing Directive 2008/94/EC.

Amendment 179 #

Proposal for a directive
Article 6 – paragraph 4

4. Member States shall limit the duration of the stay of individual enforcement actions to a maximum period of no more than ~~four~~three months.

Amendment 180 #

Proposal for a directive
Article 6 – paragraph 4

4. Member States shall limit the duration of the stay of individual enforcement actions to a maximum period of no more than ~~four~~six months.

Amendment 181 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 6 – paragraph 4

4. Member States shall limit the duration of the stay of individual enforcement actions to a maximum period of no more than ~~four month~~70 days.

Amendment 182 #

Proposal for a directive
Article 6 – paragraph 5 – introductory part

5. Member States may nevertheless enable judicial or administrative authorities to extend the initial duration of the stay of individual enforcement actions or to grant a new stay of individual enforcement actions, upon request of the debtor or of creditors involved in the negotiation of the restructuring plan. Such extension or new period of stay of individual enforcement actions shall be granted only if there is evidence that:

Amendment 183 #

Proposal for a directive
Article 6 – paragraph 5 – point -a (new)

-a a majority of creditors involved in the negotiation of a restructuring plan favours the prolonging of a stay;

Amendment 184 #

Proposal for a directive
Article 6 – paragraph 5 – point a

(a) relevant progress has been made in the negotiations on the restructuring plan or the negotiations on transfer of a going concern to another undertaking under the conditions laid down in this Directive; and

Amendment 185 #

Proposal for a directive
Article 6 – paragraph 6

6. Any further extensions shall be given only if the conditions referred to in points (a) and (b) of paragraph 5 are met and the circumstances of the case show a strong likelihood that a restructuring plan will be adopted, and there is a possibility of survival of the debtor's business.

Amendment 186 #

Proposal for a directive
Article 6 – paragraph 7

7. The total duration of the stay of individual enforcement actions, including extensions and renewals, shall not exceed ~~twelve~~six months.

Amendment 187 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 6 – paragraph 7

7. The total duration of the stay of individual enforcement actions, including extensions and renewals, shall not exceed ~~twelve month~~100 days.

Amendment 188 #

Proposal for a directive
Article 6 – paragraph 9

9. Member States shall ensure that, where an individual creditor or a single class of creditors is or would be unfairly prejudiced by a stay of individual enforcement actions, the judicial or administrative authority may decide not grant the stay of individual enforcement actions or may lift a stay of individual enforcement actions already granted in respect of that creditor or class of creditors, at the request of the creditors concerned. An unfair prejudice exists at least where if a creditor or class of creditor is facing considerable economic difficulties.

Amendment 189 #

Proposal for a directive
Article 6 – paragraph 9

9. Member States shall ensure that, where an individual creditor or a single class of creditors is or would be unfairly prejudiced by a stay of individual enforcement actions, or a vulnerable creditor would encounter financial difficulties, the judicial or administrative authority may decide not grant the stay of individual enforcement actions or may lift a stay of individual enforcement actions already granted in respect of that creditor or class of creditors, at the request of the creditors concerned.

Amendment 190 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 7 – paragraph 2

2. A general stay covering all creditors shall prevent the opening of insolvency procedures at the request of one or more creditors, with the exception of workers, in accordance with Article 6(3).

Amendment 191 #

Proposal for a directive
Article 7 – paragraph 2

2. A general stay covering all creditors involved in the negotiation of the restructuring plan shall prevent the opening of insolvency procedures at the request of one or more creditors.

Amendment 192 #

Proposal for a directive
Article 7 – paragraph 3

3. Member States ~~may~~shall ensure that a derogateion from paragraph 1 where the debtor becomes illiquid and therefore unable to pay his debts as they fall due during the stay period will be put in place. In that case, Member States shall ensure that restructuring procedures are not automatically terminated and that, upon examining the prospects for achieving an agreement on a successful restructuring plan within the period of the stay, a judicial or administrative authority may decide to defer the opening of insolvency procedure and keep in place the benefit of the stay of individual enforcement actions, upon the condition of not financially troubling the creditors severely.

Amendment 193 #

Proposal for a directive
Article 7 – paragraph 3

3. Member States may derogate from paragraph 1 where the debtor becomes illiquid and therefore unable to pay his debts as they fall due during the stay period. In that case, Member States shall ensure that restructuring procedures are not automatically terminated and that, upon examining the prospects for achieving an agreement on a successful restructuring or economically viable business transfer plan within the period of the stay, a judicial or administrative authority may decide to defer the opening of insolvency procedure and keep in place the benefit of the stay of individual enforcement actions.

Amendment 194 #

Proposal for a directive
Article 7 – paragraph 3

3. Member States may derogate from paragraph 1 where the debtor becomes illiquid and therefore unable to pay his debts as they fall due during the stay period. In that case, Member States shall ensure that restructuring procedures are not automatically terminated and that, upon examining the prospects for achieving an agreement on a successful restructuring or going-concern transfer plan within the period of the stay, a judicial or administrative authority may decide to defer the opening of insolvency procedure and keep in place the benefit of the stay of individual enforcement actions.

Amendment 195 #

Proposal for a directive
Article 7 – paragraph 3

3. Member States ~~may~~shall derogate from paragraph 1 where the debtor becomes illiquid and therefore unable to pay his debts as they fall due during the stay period. In that case, Member States shall ensure that restructuring procedures are not automatically terminated and that, upon examining the prospects for achieving an agreement on a successful restructuring plan within the period of the stay,authorise a judicial or administrative authority ~~may decide~~ to defer the opening of insolvency procedure and to keep in place the benefit of the stay of individual enforcement actions in order to examine the prospects for achieving an agreement on a successful restructuring plan within the period of the stay.

Amendment 196 #

Proposal for a directive
Article 7 – paragraph 3

3. Member States ~~may~~shall derogate from paragraph 1 where the debtor becomes illiquid and therefore unable to pay his debts as they fall due during the stay period. In that case, Member States shall ensure that restructuring procedures are not automatically terminated and that, upon examining the prospects for achieving an agreement on a successful restructuring plan within the period of the stay, a judicial or administrative authority may decide to defer the opening of insolvency procedure and keep in place the benefit of the stay of individual enforcement actions.

Amendment 197 #

Proposal for a directive
Article 7 – paragraph 4

4. Member States ~~shall ensu~~may require that, during the stay period, creditors to which the stay applies may not withhold performance or terminate, accelerate or in any other way modify essential executory contracts to the detriment of the debtor for debts that came into existence prior to the stay. Member States may limit the application of this provision to essential contracts which are necessary for the continuation of the day-to-day operation of the business, upon the condition of not financially troubling the creditors severely.

Amendment 198 #

Proposal for a directive
Article 7 – paragraph 4

4. Member States shall ensure that, during the stay period, creditors to which the stay applies may not withhold performance or terminate, accelerate or in any other way modify executory contracts to the detriment of the debtor for debts that came into existence prior to the stay. Member States may limit the application of this provision to ~~essential~~ contracts which are necessary for the continuation of the day- to-day operation of the business.

Amendment 199 #

Proposal for a directive
Article 7 – paragraph 5

5. Member States ~~shall ensu~~may require that creditors may not withhold performance or terminate, accelerate or in any other way modify executory contracts to the detriment of the debtor by virtue of a contractual clause providing for such measures, solely by reason of the debtor's entry into restructuring negotiations, a requested for a stay of individual enforcement actions, the ordering of the stay as such or any similar event connected to the stay.

Amendment 200 #

Proposal for a directive
Article 7 – paragraph 6

6. Member States shall ensure that nothing prevents the debtor from paying in the ordinary course of business claims of or owed to unaffected creditors and the claims of affected creditors that arise after the stay is granted and which continue to arise throughout the period of the stay. During that period, debtors shall be able to execute transactions that are in the interest of the continuity of the business.

Amendment 201 #

Proposal for a directive
Article 8 – paragraph 1 – point a

(a) the identity of the ~~debtor or the~~ debtor’s business for which the restructuring plan is proposed;

Amendment 202 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 8 – paragraph 1 – point b

(b) a valuation of the present value of the debtor or the debtor's business as well as a reasoned statement on the causes and the extent of the financial difficulties of the debtor, including a description of any assets, debts and their location; this shall include a relation of the financial obligations and flows with the business' parent companies and subsidiaries in order to estimate the financial capacity of the debtor's economic group when joint responsibility may arise;

Amendment 203 #

Proposal for a directive
Article 8 – paragraph 1 – point b

(b) a valuation of the present value of the debtor or the debtor'’s business, following problem solving or business divestiture procedures, as well as a reasoned statement on the causes and the extent of the financial difficulties of the debtor;

Amendment 204 #

Proposal for a directive
Article 8 – paragraph 1 – point b

(b) a valuation of the present value of the ~~debtor or the~~ debtor's business as well as a reasoned statement on the causes and the extent of the financial difficulties of the debtor;

Amendment 205 #

Proposal for a directive
Article 8 – paragraph 1 – point e

(e) the identity of non-affected ~~partie~~creditors and equity holders, whether named individually or described by reference to one or more categories of debt, together with a statement of the reasons why it is not proposed to affect them;

Amendment 206 #

Proposal for a directive
Article 8 – paragraph 1 – point f – point iii a (new)

(iiia) the possibilities for selling businesses as going concerns, selling prices or possible sale terms, the implications of those prices or terms for the dividends that creditors would receive compared with the dividend that a creditor would probably have received had the business in question been liquidated or the priority of creditors determined, and the consequences for workers, employment and activity, or for each stakeholder.

Amendment 207 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 8 – paragraph 1 – point g

(g) an opinion or reasoned statement by the person responsible for proposing the restructuring plan which explains why the business is viable, how implementing the proposed plan is likely to result in the debtor avoiding insolvency and restore its long-term viability, and states any anticipated necessary pre-conditions for its success. Such an opinion or reasoned statement shall be the subject of validation by an external expert.

Amendment 208 #

Proposal for a directive
Article 8 – paragraph 1 – point g

(g) an opinion or reasoned statement by the person responsible for proposing the restructuring plan which explains why the business is viable, how implementing the proposed plan is likely to result in the debtor avoiding insolvency, and/or to restore its long-term viability, and states any anticipated necessary pre-conditions for its success.

Amendment 209 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 8 – paragraph 1 – point g a (new)

(ga) Workers’ claims or other rights shall be treated taking into account that any financial claims by workers shall have full priority.

Amendment 210 #

Proposal for a directive
Article 8 – paragraph 2

2. Member States shall make a model for restructuring plans available online. That model shall contain at least the information required under national law and shall provide general but practical information on how the model is to be used. The model shall be made available in the official language or languages of the Member State. Member States shall endeavour to make the model available in other languages, in particular in languages used in international business. It shall be designed in such a way that it can be adapted to the needs and circumstances of every case. In addition, Member States shall provide access to professional advice for small and medium sized enterprises and entrepreneurs on a low cost basis.

Amendment 211 #

Proposal for a directive
Article 8 – paragraph 2

2. Member States shall provide access to professional advice for micro and small enterprises on a low cost basis and make a model for restructuring plans available online. That model shall contain at least the information required under national law and shall provide general but practical information on how the model is to be used. The model shall be made available in the official language or languages of the Member State. Member States shall endeavour to make the model available in other languages, in particular in languages used in international business. It shall be designed in such a way that it can be adapted to the needs and circumstances of every case.

Amendment 212 #

Proposal for a directive
Article 8 – paragraph 3 a (new)

Amendment 213 #

Proposal for a directive
Article 8 – paragraph 3 a (new)

3a. Member States may introduce provisions allowing one or more creditors to propose an alternative plan to that proposed by the debtor or by a creditor with the debtor’s agreement.

Amendment 214 #

Proposal for a directive
Article 8 – paragraph 3 b (new)

3b. The obligations of employers to inform and consult workers shall not be put into effect until a plan has been finalised.

Amendment 215 #

Proposal for a directive
Article 8 – paragraph 3 c (new)

3c. Procedures for implementing restructuring plans that provide for creditors to receive a dividend at least equal to that which they would have received had the assets been sold and the priority of creditors determined following insolvency proceedings shall constitute a bankruptcy procedure within the meaning of the abovementioned directives.

Amendment 216 #

Neena GILL

Proposal for a directive
Article 8 a (new)

Article 8a Workers’ claims or other rights shall not be affected by restructuring plans.

Amendment 217 #

Proposal for a directive
Article 9 – paragraph 1

1. Member States shall ensure that ~~any affected creditors~~the procedures provided for in national law are such that any creditors affected by a waiver plan have a right to vote on the adoption of a restructuring plan. Member States may also grant such voting rights to affected equity holders, in accordance with Article 12(2). Member States shall ensure that the procedures provided for in national law are such that any creditors affected by a plan to sell a business as a going concern to another business, and who would not be repaid in full, would have the right to raise objections in the jurisdiction called upon to authorise the sale. Member States shall ensure that debtors, having embarked on a confidential procedure, may at any time thereafter initiate a further procedure publicly, if they consider the latter to be necessary before the plan has been adopted or the sale has been authorised by the jurisdiction concerned.

Amendment 218 #

Proposal for a directive
Article 9 – paragraph 1

1. Member States shall determine which types of creditors might be affected by a restructuring plan and ensure that any affected creditors have a right to vote on the adoption of a restructuring plan. Member States may also grant such voting rights to affected equity holders, in accordance with Article 12(2).

Amendment 219 #

Proposal for a directive
Article 9 – paragraph 1

1. Member States shall ensure that any affected creditors have a right to vote on the adoption of a restructuring plan in full knowledge of the consequences it entails for each of them. Member States may also grant such voting rights to affected equity holders, in accordance with Article 12(2).

Amendment 220 #

Proposal for a directive
Article 9 – paragraph 1

1. Member States shall ensure that any affected creditors including public ones have a right to vote on the adoption of a restructuring plan. Member States may also grant such voting rights to affected equity holders, in accordance with Article 12(2).

Amendment 221 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 9 – paragraph 1

1. Member States shall ensure that any affected creditors, including workers, have a right to vote on the adoption of a restructuring plan. Member States may also grant such voting rights to affected equity holders, in accordance with Article 12(2).

Amendment 222 #

Proposal for a directive
Article 9 – paragraph 2

2. Member States shall ensure that affected parties are treated in separate classes which reflect the class formation criteria. Classes shall be formed in such a way that each class comprises claims or interests with rights that are sufficiently similar to justify considering the members of the class a homogenous group with commonality of interest. As a minimum, secured and unsecured claims shall be treated in separate classes for the purposes of adopting a restructuring plan. Member States ~~may~~shall also provide ~~that workers are treated in a separate class of their own~~specific rules supporting separate class formation for otherwise especially vulnerable creditors, such as workers or small suppliers.

Amendment 223 #

Proposal for a directive
Article 9 – paragraph 2

2. Member States shall ensure that affected parties are treated in separate classes which reflect the class formation criteria. Classes shall be formed in such a way that each class comprises claims or interests with rights that are sufficiently similar to justify considering the members of the class a homogenous group with commonality of interest. As a minimum, secured and unsecured claims shall be treated in separate classes for the purposes of adopting a restructuring plan. Member States may also provide that workers ~~are~~, and micro and small enterprises, are each treated in a separate class of their own.

Amendment 224 #

Proposal for a directive
Article 9 – paragraph 2

Amendment 225 #

Proposal for a directive
Article 9 – paragraph 2

2. Member States shall ensure that affected parties are treated in separate classes which reflect the class formation criteria. Classes shall be formed in such a way that each class comprises claims or interests with rights that are sufficiently similar to justify considering the members of the class a homogenous group with commonality of interest. As a minimum, secured and unsecured claims shall be treated in separate classes for the purposes of adopting a restructuring plan. Member States ~~may~~shall also provide that workers are treated in a separate class of their own.

Amendment 226 #

Proposal for a directive
Article 9 – paragraph 2

2. Member States shall ensure that affected parties are treated in separate classes which reflect the class formation criteria. Classes shall be formed in such a way that each class comprises claims or interests with rights that are sufficiently similar to justify considering the members of the class a homogeneous group with commonality of interest. As a minimum, secured and unsecured claims shall be treated in separate classes for the purposes of adopting a restructuring plan. Member States mayust also provide that workers are treated in a separate class of their own.

Amendment 227 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 9 – paragraph 2

2. Member States shall ensure that affected parties are treated in separate classes which reflect the class formation criteria. Classes shall be formed in such a way that each class comprises claims or interests with rights that are sufficiently similar to justify considering the members of the class a homogenous group with commonality of interest. As a minimum, secured and unsecured claims shall be treated in separate classes for the purposes of adopting a restructuring plan. Member States ~~may also~~shall provide that workers are treated in a separate class of their own.

Amendment 228 #

Proposal for a directive
Article 9 – paragraph 4

Amendment 229 #

Proposal for a directive
Article 9 – paragraph 4

4. A restructuring plan shall be deemed to be adopted by affected ~~partie~~creditors and equity holders, provided that a majority in the amount of their claims or interests is obtained in each and every class. Member States shall lay down the required majorities for the adoption of a restructuring plan, which shall be in any case not higher than 75% in the amount of claims or interests in each class.

Amendment 230 #

Proposal for a directive
Article 9 – paragraph 4

4. A restructuring plan shall be deemed to be adopted by affected parties, provided that a majority in the amount of their claims or interests is obtained in each and every class. Member States shall lay down the required majorities for the adoption of a restructuring plan, which shall be in any case not ~~high~~lower than 75% in the amount of claims or interests in each class.

Amendment 231 #

Proposal for a directive
Article 9 – paragraph 6

6. Where the necessary majority is not reached in one or more dissenting voting classes, the plan may still be confirmed by a judicial or administrative authority if it complies with the cross-class cram-down requirements set out in Article 11.

Amendment 232 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 9 – paragraph 6 a (new)

6a. Member States shall guarantee that in the case of lack of collaboration of other creditors, the workers’ restructuring plan may be presented to the competent administration or court and adopted without the consent of non-cooperative creditors.

Amendment 233 #

Proposal for a directive
Article 10 – paragraph 1 – introductory part

1. Member States shall ensure that the ~~following~~ restructuring plans which affect the interests of dissenting affected parties can become binding on the parties only if they are confirmed by a judicial or administrative authority:.

Amendment 234 #

Proposal for a directive
Article 10 – paragraph 1 – introductory part

1. Member States shall ensure that at least the following restructuring plans can become binding on the parties only if they are confirmed by a judicial or administrative authority:

Amendment 235 #

Proposal for a directive
Article 10 – paragraph 1 – point a

~~(a) restructuring plans which affect the interests of dissenting affected parties;~~deleted

Amendment 236 #

Proposal for a directive
Article 10 – paragraph 1 – point b

~~(b) restructuring plans which provide for new financing.~~deleted

Amendment 237 #

Proposal for a directive
Article 10 – paragraph 1 a (new)

1a. Member States shall ensure that plans to sell a business as a going concern cannot become binding on the parties unless they are confirmed by a judicial or administrative authority under national law. In each of the cases referred to in this paragraph, Member States shall ensure that the procedures provided for in national law are such that workers have the right to submit comments to, or raise objections before, the judicial or administrative authority called upon to rule on the confirmation of the plan.

Amendment 238 #

Proposal for a directive
Article 10 – paragraph 2 – point c

~~(c) any new financing is necessary to implement the restructuring plan and does not unfairly prejudice the interests of creditors.~~deleted

Amendment 239 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 10 – paragraph 2 – point c a (new)

(ca) workers’ representatives have been informed and consulted.

Amendment 240 #

Proposal for a directive
Article 10 – paragraph 3

Amendment 241 #

Proposal for a directive
Article 10 – paragraph 3

3. Member States shall ensure that judicial or administrative authorities ~~may~~shall refuse to confirm a restructuring plan where that plan does not have a reasonable prospect of preventing the insolvency of the debtor and ensuring the viability of the business.

Amendment 242 #

Proposal for a directive
Article 10 – paragraph 4

Amendment 243 #

Proposal for a directive
Article 11 – paragraph 1 – point a

(a) fulfils the conditions in Article 10(2) and does not run counter to Article 10(3);

Amendment 244 #

Proposal for a directive
Article 11 – paragraph 1 – point b

(b) has been approved by at least one class of affected creditors other than an equity-holder class and any other class which, upon a valuation of the enterprise, would not receive any payment or other consideration if the normal ranking of liquidation priorities were applied, and where that class or those classes of affected creditors represent a majority of the claims;

Amendment 245 #

Proposal for a directive
Article 11 – paragraph 1 – point b

(b) has been approved by at least one class of affected creditors, representing at least a majority in the amount of claims, and other than an equity-holder class and any other class which, upon a valuation of the enterprise, would not receive any payment or other consideration if the normal ranking of liquidation priorities were applied;

Amendment 246 #

Proposal for a directive
Article 11 – paragraph 2

2. Member States may vary the minimum number of affected classes required to approve the plan laid down in point (b) of paragraph (1), unless this number falls below the majority of classes and disregards the class of micro and small enterprises.

Amendment 247 #

Proposal for a directive
Article 12 – paragraph 1

1. Member States ~~shall~~may ensure that, where there is a likelihood of insolvency, shareholders and other equity holders with interests in a debtor may not unreasonably prevent the adoption or implementation of a restructuring plan which would restore the viability of the business.

Amendment 248 #

Proposal for a directive
Article 12 – paragraph 2 a (new)

2a. Member States may introduce provisions authorising holders of equity in small and medium-sized undertakings to provide non-monetary assistance under the plan.

Amendment 249 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 12 a (new)

Article 12a Workers Member States shall ensure the rights of workers are not undermined by the restructuring process and that there is independent supervision of compliance with relevant national and Union legislation, including those set out in the present directive. Those rights shall include, in particular: (i) the right to collective bargaining and industrial action; (ii) the right to information and consultation of workers and workers' representatives, including notably access to information on any procedure which could have an impact on employment and/or the ability of workers to recover their wages and any future payments, including occupational pensions. Members States shall also ensure that workers are everywhere treated as a preferential and secure class of creditors.

Amendment 250 #

Proposal for a directive
Article 13 – paragraph 1

Amendment 251 #

Proposal for a directive
Article 13 – paragraph 1

1. A liquidation value shall be determined by the judicial or administrative authority where a restructuring or transfer plan is challenged on the grounds of an alleged breach of the best interest of creditors test.

Amendment 252 #

Proposal for a directive
Article 13 – paragraph 2 – introductory part

Amendment 253 #

Proposal for a directive
Article 13 – paragraph 2 – point b a (new)

(ba) where a plan involves the transfer of all or part of a business

Amendment 254 #

Proposal for a directive
Article 14 – paragraph 2

2. Creditors who are not i~~nvolv~~dentified in the ~~adoption of a~~ restructuring plan confirmed by a judicial or administrative authority shall not be affected by the plan.

Amendment 255 #

Proposal for a directive
Article 15 – paragraph 4

4. Member States shall ensure that, where an appeal pursuant to paragraph 3 is upheld, the judicial authority may either: (a) (b) confirm the plan and grant monetary compensation to the dissenting creditors, payable by the debtor or by the creditors who voted in favour of the plan.deleted set aside the restructuring plan; or

Amendment 256 #

Proposal for a directive
Article 15 – paragraph 4 – point b

(b) confirm the plan and ~~grant monetary compensation to the dissenting creditors~~assess the possibility for dissenting creditors that suffer unjustifiable damage under the plan to be granted monetary compensation, payable by the debtor or by the creditors who voted in favour of the plan.

Amendment 257 #

Proposal for a directive
Article 15 – paragraph 4 – point b

(b) confirm the plan and grant monetary compensation to the dissenting creditors, payable by the debtor ~~or by the creditors who voted in favour of the plan~~.

Amendment 258 #

Proposal for a directive
Article 16 – paragraph 2

2. Member States may afford granters of new or interim financing the right to receive payment with priority in the context of subsequent liquidation procedures in relation to other creditors that would otherwise have superior or equal claims to money or assets. In such cases, Member States shall rank new financing and interim financing ~~at least~~ senior to the claims of ordinary unsecured creditors.

Amendment 259 #

Proposal for a directive
Article 16 – paragraph 2

2. Member States may afford grantors of new or interim financing the right to receive payment with priority in the context of subsequent liquidation procedures in relation to other creditors that would otherwise have superior or equal claims to money or assets. In such cases, Member States shall rank new financing and interim financing ~~at least~~ senior to the claims of ordinary unsecured creditors without affecting the ranking of secured creditors.

Amendment 260 #

Proposal for a directive
Article 16 – paragraph 3

3. The granters of new financing and interim financing in a restructuring process shall be exempted from civil, administrative and criminal liability in the context of the subsequent insolvency of the debtor, unless such financing has been granted fraudulently or in bad faith.deleted

Amendment 261 #

Proposal for a directive
Article 17 – paragraph 3

3. Member States ~~may~~shall require the transactions referred to in point (e) of paragraph 2 to be approved by a practitioner in the field of restructuring or by a judicial or administrative authority in order to benefit from the protection referred to in paragraph 1.

Amendment 262 #

Proposal for a directive
Article 18 – paragraph 1 – point b

(b) to have due regard to the interests of creditors and other stakeholders, including in relation to employment;

Amendment 263 #

Proposal for a directive
Article 18 – paragraph 1 – point d a (new)

(da) to fulfil, in the manner most compatible with confidentiality, the obligations arising from the directives granting rights to workers.

Amendment 264 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 18 – paragraph 1 – point d a (new)

(da) not to reduce intentionally the value of the company's net assets below the level necessary to discharge accrued liabilities to workers;

Amendment 265 #

Proposal for a directive
Article 18 – paragraph 1 a (new)

National law shall provide for a diminished liability regime for managers who comply with subparagraph 1 and an aggravated sanction regime for managers who have not done so, either with intent to defraud or with obvious bad faith, or for managers who, despite being alerted by workers or their representatives to a risk of insolvency, did not take the immediate steps referred to above or who misused the restructuring procedures by not minimising the loss for creditors, workers and other stakeholders.

Amendment 266 #

Proposal for a directive
Article 18 – paragraph 1 a (new)

Failure to comply with the above obligations shall be taken into account in determining the period and conditions of discharge, as provided for in Article 22, and can lead to disqualification orders for directors, which, if issued in one Member State, shall prevent the same person from undertaking managerial duties in undertakings based in other Member States.

Amendment 267 #

Proposal for a directive
Article 22 – paragraph 1 – introductory part

1. By way of derogation from Articles 19, 20 and 21, Member States ~~may~~shall maintain or introduce provisions restricting access to discharge or laying down longer periods for obtaining a full discharge or longer disqualification periods ~~in certain~~where the over-indebted entrepreneur acted dishonestly or in bad faith towards the creditors when becoming indebted or during the collection of the debts, and may maintain or introduce provisions restricting access to discharge or laying down longer periods for obtaining a full discharge or longer disqualification periods in other well- defined circumstances and where such limitations are justified by a general interest, in particular where:

Amendment 268 #

Proposal for a directive
Article 22 – paragraph 1 – point a

~~(a) the over-indebted entrepreneur acted dishonestly or in bad faith towards the creditors when becoming indebted or during the collection of the debts;~~deleted

Amendment 269 #

Proposal for a directive
Article 22 – paragraph 1 – point b

(b) the over-indebted entrepreneur does not substantially adhere to a repayment plan or to any other legal obligation aimed at safeguarding the interests of creditors;, taking into consideration the difficulties in terms of adherence to insolvency and restructuring procedures, which micro and small enterprises encounter.

Amendment 270 #

Proposal for a directive
Article 22 – paragraph 1 – point b a (new)

(ba) directors have systematically failed to comply with their obligations, laid down in Article 18.

Amendment 271 #

Proposal for a directive
Article 23 – paragraph 1

1. Member States shall ensure that, where an over-indebted entrepreneur has professional debts incurred in the course of his or her trade, business, craft or profession as well as personal debts incurred outside those activities, professional and personall debts are to be treated in ~~a singl~~separate procedures for the purposes of obtaining a discharge.

Amendment 272 #

Proposal for a directive
Article 23 – paragraph 1

1. Member States ~~shall~~may ensure that, where an over-indebted entrepreneur has professional debts incurred in the course of his or her trade, business, craft or profession as well as personal debts incurred outside those activities, all debts are treated in a single procedure for the purposes of obtaining a discharge.

Amendment 273 #

Proposal for a directive
Article 23 – paragraph 2

2. Member States may derogate from paragraph 1 and stipulate that professional and personal debts are to be treated in separate procedures, provided that these procedures can be coordinated for the purposes of obtaining a discharge in accordance with this Directive.deleted

Amendment 274 #

Proposal for a directive
Article 24 – paragraph 1

1. Member States shall ensure that the members of the judiciary and administrative authorities dealing with restructuring, insolvency and second chance matters ~~receive initial and further training to~~have the expertise and experience at a level appropriate to their responsibilities.

Amendment 275 #

Proposal for a directive
Article 25 – paragraph 1

1. Member States shall ensure that mediators, insolvency practitioners and other practitioners appointed in restructuring, insolvency and second chance matters ~~recei~~have the ~~necessary initial and further training~~expertise and experience in order to ensure that their services are provided in an effective, impartial, independent and competent way in relation to the parties.

Amendment 276 #

Proposal for a directive
Article 25 – paragraph 1 a (new)

1a. The Commission shall facilitate the sharing of best practices between Member States in view of improving the quality of training across the Union, including by means of networking and the exchange of experiences and capacity building tools.

Amendment 277 #

Proposal for a directive
Article 25 – paragraph 2

2. Member States shall encourage, by any means which they consider appropriate, the development of, and adherence to, minimum professional standards pertaining to training, professional qualifications and voluntary codes of conduct by practitioners in the field of restructuring, insolvency and second chance, as well as other effective oversight mechanisms concerning the provisions of such services.

Amendment 278 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 25 – paragraph 2

2. Member States shall en~~courage, by any means which they consider appropriate, the development of, and adherence to, voluntary codes of conduct by~~sure that practitioners in the field of restructuring, insolvency and second chance, as well as other effective oversight mechanisms concerning the provisions of such services, comply with statutory codes of conduct, which shall include at least relevant provisions on: training, qualification, licensing, registration, personal liability, insurance and good repute.

Amendment 279 #

Proposal for a directive
Article 25 – paragraph 2

2. Member States shall encourage, by any means which they consider appropriate, the development of, and adherence to, voluntary codes of conduct by practitioners in the field of restructuring, insolvency and second chance, as well as other effective oversight mechanisms cset minimum binding standards for practitioners, such as training and professional qualifications, a registered status as a practitioncer~~ning the~~, liability provisions ~~of such serv~~and a professional code of ethices.

Amendment 280 #

Proposal for a directive
Article 26 – paragraph 3

3. Where practitioners in the field of restructuring, insolvency and second chance are appointed by the judicial or administrative authority, Member States shall ensure that the criteria concerning the manner in which the judicial or administrative authority selects such a practitioner are clear and transparent. In selecting a practitioner in the field of restructuring, insolvency and second chance for a particular case, due consideration shall be given to the practitioner's experience and expertise. ~~Where appropriate, the debtors and creditors shall be consulted in the selection of the practitioner.~~

Amendment 281 #

Proposal for a directive
Article 27 – paragraph 2

2. Member States shall ensure that the fees charged by practitioners in the field of restructuring, insolvency and second chance are governed by rules which incentivise a timely and efficient resolution of procedures with due regard to the complexity of the case, and to the responsibilities of an administrative or judicial authority. Member States shall ensure that appropriate procedures with built-in safeguards are available to ensure that any disputes over remuneration can be resolved in a timely manner.

Amendment 282 #

Proposal for a directive
Article 27 a (new)

Article 27a Information available to second chance entrepreneurs 1. Member States shall ensure that second chance entrepreneurs have access to relevant, up-to-date, clear, concise and user-friendly information about the availability of administrative, legal, business or financial support tailored to them and any means available to them to facilitate the set-up of a new business. 2. Member States shall communicate to the Commission on a yearly basis the information to be provided under paragraph 1. 3. The Commission shall publish the information to be provided under paragraph 1 and received according to paragraph 2 in a user-friendly way on its website.

Amendment 283 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 28 – paragraph 1 – point c

Amendment 284 #

Proposal for a directive
Article 29 – paragraph 1 – subparagraph 1 – point g a (new)

(ga) the number of job losses, transfer of part or whole of the business, part redundancy, impact of restructuring agreements on employment, breaches of directors' obligations and the level of public finance.

Amendment 285 #

Proposal for a directive
Article 29 – paragraph 1 – subparagraph 1 – point g a (new)

(ga) the number of debtors who, after having undergone a procedure referred to in points (a) (ii) and (iii), launched a new business;

Amendment 286 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 29 – paragraph 1 – subparagraph 1 – point g a (new)

(ga) the number of job losses and the impact on workers' conditions of restructuring agreements and insolvency procedures;

Amendment 287 #

Proposal for a directive
Article 29 – paragraph 1 – subparagraph 1 – point g b (new)

(gb) for debtors who launched a new business after having undergone a procedure referred to in points (a) (ii) and (iii), the average time between the end of the procedure and the launch of the new business;

Amendment 288 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 29 – paragraph 1 – subparagraph 1 – point g b (new)

(gb) the number of fraudulent restructuring and insolvency procedures and the functioning of enforcement mechanisms in place;

Amendment 289 #

Proposal for a directive
Article 29 – paragraph 1 – subparagraph 1 – point g c (new)

(gc) the work carried out by each practitioner, including with respect to data referred to in points (a), (b), (c), (d) and (e) of this paragraph;

Amendment 290 #

Proposal for a directive
Article 29 – paragraph 3

3. Member States shall compile statistics from the aggregate data referred to in paragraphs 1 and 2 for full calendar years ending on 31 December of each year, starting with data collected for the first full calendar year following [the date of start of application of implementing measures]. These statistics shall be communicated to the Commission on the basis of a standard data communication form annually, by 31 March of the calendar year following the year for which data is collected. Member States shall make these statistics publicly available and present them by means of a user-friendly website.

Amendment 291 #

Proposal for a directive
Article 29 – paragraph 4 a (new)

4a. The Commission shall centralise on their website the information laid down in paragraphs 1, 2 and 3 in a public, free and user-friendly way.

Amendment 292 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 30 a (new)

Article 30a Obligation to report 1. Any debtor involved in a restructuring, insolvency or discharge procedure in a Member State that also operates in another Member State shall report to the competent authority, administration or court of both countries the beginning of any of these procedures. 2. The debtor is obliged to report the activity, volume and structure of its business in other Member States or third countries, segregated country by country, to the administration of court involved in the restructuring, insolvency or discharge procedure.

Amendment 293 #

Proposal for a directive
Article 31 – paragraph 1 – introductory part

1. Th~~is Directive shall be without prejudice to the following acts~~e provisions of the following acts shall prevail over this Directive:

Amendment 294 #

Proposal for a directive
Article 31 – paragraph 1 – introductory part

1. Th~~is Directive shall be without prejudice to the following acts~~e provisions of the following acts shall prevail over this Directive:

Amendment 295 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 31 – paragraph 1 – point a a (new)

(aa) Directive 2008/94/EC concerning the protection of employees in the event of insolvency of an employer

Amendment 296 #

Proposal for a directive
Article 31 – paragraph 1 – point c a (new)

(ca) Directives 98/59/EC, 2001/23/EC, 2002/14EC, 2008/94/EC and 2009/38/EC and in particular the provisions on collective redundancies, workers' rights to constant information and consultation and in the case of transfers of undertakings.

Amendment 297 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Article 31 – paragraph 2

2. This Directive shall be without prejudice to workers' rights guaranteed by Directives 98/59/EC, 2001/23/EC, 2002/14EC, 2008/94/EC and 2009/38/EC and the European Charter of Fundamental Rights.

Amendment 298 #

Proposal for a directive
Article 33 – paragraph 1

No later than [5[3 years from the date of start of application of implementing measures] and every 75 years thereafter, the Commission shall present to the European Parliament, the Council and the European Economic and Social Committee a report on the application of this Directive, including on whether additional measures to consolidate and strengthen the legal framework on restructuring, insolvency and second chance should be considered including the availability of resources and of specialised courts.

Amendment 61 #

Proposal for a directive
Recital 1

(1) The objective of this Directive is to 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 on preventive restructuring, insolvency and second chance. This Directive aims at removing such obstacles by ensuring that viable enterprises in financial difficulties have access to effective national preventive restructuring frameworks which enable them to continue operating while contributing as fully as they would in the event of liquidation to satisfying the creditors’ claims; that honest over indebted entrepreneurs have a second chance after a full discharge of debt after a reasonable period of time; and that the effectiveness of restructuring, insolvency and discharge procedures is improved, in particular with a view to shortening their length. Preventive solutions, sometimes called ‘pre-pack’, are a feature of a growing trend in modern insolvency law towards favouring approaches which, unlike the traditional approach of liquidating a business which is in crisis, have the aim of restoring it to health or at least salvaging those of its units that are still economically viable. That practice is praiseworthy and often helps to preserve jobs.

Amendment 62 #

Proposal for a directive
Recital 1

(1) The objective of this Directive is to remove obstacles to the ~~exercise of fundamental freedoms, such as the~~ free movement of capital and freedom of establishment~~, which result~~ stemming from differences between national laws and procedures on preventive restructuring, insolvency and second chance, thereby contributing to the establishment of a true Capital Markets Union. This Directive aims at removing such obstacles by ensuring that viable enterprises in financial difficulties have access to effective national preventive restructuring frameworks which enable them to continue operating; that honest over -indebted entrepreneurs have a second chance after a full discharge of debt after a reasonable period of time; and that the effectiveness of restructuring, insolvency and discharge procedures is improved, in particular with a view to shortening their length.

Amendment 63 #

Proposal for a directive
Recital 2

(2) Restructuring should enable enterprises in financial difficulties to continue business in whole or in part, by changing the composition, conditions or structure of assets and liabilities or of their capital structure, including by sales of assets or parts of the business. Preventive restructuring frameworks should above all enable the enterprises to restructure at an early stage and to avoid their insolvency. Those frameworks should maximise the total value to creditors, owners and the economy as a whole and should prevent unnecessary job losses and losses of knowledge and skills. They should also prevent the build-up of non-performing loans (NPL), which absorb bank capital, reduce the efficiency of capital allocation, weigh heavily on the balance sheets of certain credit institutions and represent a challenge to the European banking system stability and hamper the development of the Banking Union. Deteriorating loan portfolios and increasing losses force banks to curtail their credit supply further increasing pressures on the non-financial sector to deleverage. Still, increased prudential oversight to incentivise banks to write off or restructure impaired loans should be considered. A robust supervision, including to ensure prudent provisioning and strong capital buffers, can enhance banks’ incentives to recognise losses. Access to timely financial information on distressed borrowers, collateral valuations, and recent NPL sales are fundamental for the development of an active market for NPL restructuring. Thus, collateral should be periodically valued by reliable and independent third parties and subject to enhanced supervisory scrutiny. Banks should obtain sound appraisals of the current fair value of the collateral from qualified professionals. Therefore, a comprehensive, co-ordinated effort is now crucial, notably through a legal framework for NPL to explore possible initiatives to facilitate the development of secondary markets for NPL should be necessary. In the restructuring process the rights of all parties involved should be protected. At the same time, non-viable businesses with no prospect of survival should be liquidated as quickly as possible.

Amendment 64 #

Proposal for a directive
Recital 2

Amendment 65 #

Proposal for a directive
Recital 2

Amendment 66 #

Proposal for a directive
Recital 2

Amendment 67 #

Proposal for a directive
Recital 2 a (new)

(2a) Businesses should also have access to restructuring operations involving outright transfer of the going concern. In such cases of indirect continuity, this allows the company to remain in business and hold its value, thereby protecting the interests of creditors, workers and allied activities, an advantage in no way undermined by a purely formal change of ownership.

Amendment 68 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Recital 2 a (new)

(2a) All workers should have the right to protection of their claims in the event of the insolvency of their employer, as set out in the European Social Charter;

Amendment 69 #

Proposal for a directive
Recital 5

(5) Excessive length of restructuring, insolvency and discharge procedures in several Member States is an important factor triggering low recovery rates and deterring investors from making business in jurisdictions where procedures risk taking too long and being unduly costly.

Amendment 70 #

Proposal for a directive
Recital 6

(6) All these differences translate into additional costs for investors when assessing the risks of debtors entering financial difficulties in one or more Member States and the costs of restructuring companies having establishments, creditors or assets in other Member States, such as is most clearly the case of restructuring international groups of companies. Many investors mention uncertainty about insolvency rules or the risk of lengthy or complex insolvency procedures in another country as a main reason for not investing or not entering into a business relationship with a counterpart outside their own country. Small and medium sized enterprises in particular do not, for the most part, have the resources to assess risks related to cross-border activities.

Amendment 71 #

Proposal for a directive
Recital 6

Amendment 72 #

Proposal for a directive
Recital 7

(7) Those differences lead to uneven conditions for access to credit and to uneven recovery rates in the Member States. A higher degree of harmonisation ~~in the field of restructuring, insolvency and second chance is thus indispensable~~could thus be beneficial for a well- functioning single market in general and for a working Capital Markets Union in particular, but it is essential to leave sufficient flexibility to Member States that have already introduced well-functioning restructuring, insolvency and second chance regimes.

Amendment 73 #

Proposal for a directive
Recital 7

(7) Those differences lead to uneven conditions for access to credit and to uneven recovery rates in the Member States, and hamper the free movement of capital in the internal market. A higher degree of harmonisation in the field of restructuring, insolvency and second chance is thus indispensable for a well- functioning single market in general and ~~for a working~~the establishment of a Capital Markets Union in particular.

Amendment 74 #

Proposal for a directive
Recital 9

(9) The obstacles to the exercise of fundamental freedoms are not limited to purely cross-border situations. An increasingly interconnected single market - where goods, services, capital and workers circulate freely – with an ever stronger digital dimension means that very few companies are purely national if all relevant elements are considered, such as their client base, supply chain, scope of activities, investor and capital base. Even purely national insolvencies may have an impact on the functioning of the single market through the so-called domino effect of insolvencies, whereby an enterprise's insolvency may trigger further insolvencies in the supply chain, to which small and medium sized enterprises are particularly vulnerable.

Amendment 75 #

Proposal for a directive
Recital 10

(10) Regulation (EU) 2015/848 of the European Parliament and of the Council62 deals with issues of jurisdiction, recognition and enforcement, applicable law and cooperation in cross-border insolvency proceedings as well as with the interconnection of insolvency registers. Its scope covers preventive procedures initiated by a public decision which promote the rescue of an economically viable debtor as well as procedures which give a second chance to entrepreneurs. However, Regulation (EU) 2015/848 does not tackle the discrepancies between those procedures in national law and does not concern confidential procedures. Furthermore, an instrument limited to cross-border insolvencies only would not remove all obstacles to free movement, nor would it be feasible for investors to determine in advance the cross-border or domestic nature of the future potential financial difficulties of the debtor. There is a need therefore to go beyond matters of judicial cooperation and to establish substantive minimum standards. _________________ 62 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).

Amendment 76 #

Proposal for a directive
Recital 11

Amendment 77 #

Proposal for a directive
Recital 11

(11) It is necessary to lower the costs of restructuring for both debtors and creditors. Therefore the differences which hamper the early restructuring of viable enterprises in financial difficulties and the possibility of a second chance for honest entrepreneurs should be reduced. That should bring greater transparency, in the Union, and more legal certainty and predictability ~~in the Union~~for both debtors and creditors. Also, it should maximise the returns to all types of creditors and investors and encourage cross-border investment. Greater coherence should also facilitate the restructuring of groups of companies irrespective of where the members of the group are located in the Union.

Amendment 78 #

Proposal for a directive
Recital 12

(12) Removing the barriers to effective restructuring of viable enterprises in financial difficulties contributes to minimising job losses, losses for creditors in the supply chain, preserves know-how and skills and hence benefits the wider economy. In order to attain that objective and to preserve employment and operations, it is necessary to enable these procedures to be conducted in whole or in part in a confidential framework, which in particular requires the rights of workers to be better specified. Facilitating a second chance for entrepreneurs avoids their exclusion from the labour market and enables them to restart entrepreneurial activities, drawing lessons from past experience. Finally, reducing the length of restructuring procedures would result in higher recovery rates for creditors as the passing of time would normally only result in a further loss of value for the enterprise. Moreover, efficient insolvency frameworks would enable a better assessment of the risks involved in lending and borrowing decisions and smooth the adjustment for over-indebted enterprises, minimizing the economic and social costs involved in their deleveraging process.

Amendment 79 #

Proposal for a directive
Recital 13

Amendment 80 #

Proposal for a directive
Recital 13

(13) In particular small and medium sized enterprises should benefit from a more coherent approach at Union level, since they do not have the necessary resources to cope with high restructuring costs and to take advantage of the more efficient restructuring procedures in some Member States. Small and medium enterprises, especially when facing financial difficulties, often do not have the resources to hire professional advice, therefore early warning tools should be put in place to alert debtors to the urgency to act. In order to help such enterprises restructure at low cost, model restructuring plans should also be developed nationally and made available online. Debtors should be able to use and adapt them to their own needs and to the specificities of their business. Finally, professional advice from practitioners in the field of restructuring should be made available at low cost.

Amendment 81 #

Proposal for a directive
Recital 13 a (new)

(13a) Member States may introduce provisions allowing one or more creditors to propose an alternative plan to counter the debtor's position of strength and the risks of it being abused, especially in companies where partners and managers are more closely identified with each other. Each Member State should stipulate the conditions under which creditors may legitimately propose such a plan.

Amendment 82 #

Proposal for a directive
Recital 15

(15) Consumer over-indebtedness is a matter of great economic and social concern and is closely related to the reduction of debt overhang. Furthermore, it is often not possible to draw a clear distinction between the consumer and business debts of an entrepreneur. A second chance regime for entrepreneurs would not be effective if the entrepreneur had to go through separate procedures, with different access conditions and discharge periods, to discharge his business personal debts and his non- business personal debts. For these reasons, although this Directive does not include binding rules on consumer over- indebtedness, Member States should be able to also apply the discharge provisions to consumers.deleted

Amendment 83 #

Proposal for a directive
Recital 15

(15) Consumer over-indebtedness is a matter of great economic and social concern and is closely related to the reduction of debt overhang. Furthermore, it is often not possible to draw a clear distinction between the consumer and business debts of an entrepreneur. A second chance regime for entrepreneurs would not be effective if the entrepreneur had to go through separate procedures, with different access conditions and discharge periods, to discharge his business personal debts and his non- business personal debts. For these reasons, although this Directive does not include binding rules on consumer over- indebtedness, Member States should be able to also apply the discharge provisions to consumers.deleted

Amendment 84 #

Proposal for a directive
Recital 15

(15) Consumer over-indebtedness is a matter of great economic and social concern and is closely related to the reduction of debt overhang. Furthermore, ~~it is often not possible to draw~~while in some jurisdictions a clear distinction is made between the consumer and business debts of an entrepreneur~~. A~~, in other jurisdictions making this distinction is more difficult and not common practice. In these jurisdictions, a second chance regime for entrepreneurs ~~would~~might not be effective if the entrepreneur had to go through separate procedures, with different access conditions and discharge periods, to discharge his business personal debts and his non-business personal debts. For these reasons, although this Directive does not include binding rules on consumer over- indebtedness, Member States should be able to also apply the discharge provisions to consumers.

Amendment 85 #

Proposal for a directive
Recital 16

(16) The earlier the debtor can detect its financial difficulties and can take appropriate action, the higher the probability of avoiding an impending insolvency or, in case of a business whose viability is permanently impaired, the more orderly and efficient the winding-up process. Clear information on the available preventive restructuring procedures as well as early warning tools should therefore be put in place to incentivise debtors who start to experience financial problems to take early action. Possible early warning mechanisms should include accounting and monitoring duties for the debtor or the debtor's management as well as reporting duties under loan agreements. ~~In addition~~Moreover, third parties with relevant information such as accountants, tax and social security authorities could be incentivised or obliged under national law to flag a negative development. In addition, the Commission should promote, in line with its digital single market strategy, the use and development of new IT technologies for notifications and online communications, to ensure more effective early warning procedures.

Amendment 86 #

Proposal for a directive
Recital 16

(16) The earlier the debtor can detect its financial difficulties and can take appropriate action, the higher the probability of avoiding an impending insolvency or, in case of a business whose viability is permanently impaired, the more orderly and efficient the winding-up process. Clear information on the available preventive restructuring procedures as well as early warning tools should therefore be put in place to incentivise debtors who start to experience financial problems to take early action. Possible early warning mechanisms should include accounting and monitoring duties for the debtor or the debtor's management as well as reporting duties under loan agreements. In addition, third parties with relevant information such as accountants~~, tax and social security~~ and tax authorities could be incentivised or obliged under national law to flag ~~a negative development~~to entrepreneurs any worrying developments concerning their business debts or the viability of their business as soon as possible.

Amendment 87 #

Proposal for a directive
Recital 16

(16) The earlier the debtor can detect its financial difficulties and can take appropriate action, the higher the probability of avoiding an impending insolvency or, in case of a business whose viability is permanently impaired, the more orderly and efficient the winding-up process. Clear information on the available preventive restructuring procedures as well as early warning tools should therefore be put in place to incentivise debtors who start to experience financial problems to take early action. Possible early warning mechanisms should include accounting and monitoring duties for the debtor taking into consideration the lack of financial resources of SMEs or the debtor's management as well as reporting duties under loan agreements. In addition, third parties with relevant information such as accountants, tax and social security authorities could be incentivised or obliged under national law to flag a negative development.

Amendment 88 #

Proposal for a directive
Recital 16 a (new)

(16a) The early warning phase, designed to anticipate the emergence of the crisis, is intended to assist by flagging difficulties arising for debtors and offering them the possibility of a rapid analysis and solution of the economic and financial problems facing the company, making available - on a voluntary basis - various resources for this purpose, without dictating given lines of conduct or necessarily revealing the existence of a crisis to third parties. It is therefore important to leave the Member States to decide on whether to restrict mandatory monitoring provisions to SMEs, bearing in mind that SMEs themselves are frequently unable to initiate restructuring processes independently because of a number of factors undermining their competitiveness (being undersized, lacking in strong in corporate governance, effective operational procedures and monitoring and planning resources) and are less able to afford to do so.

Amendment 89 #

Proposal for a directive
Recital 17

(17) A restructuring framework should be available to debtors to enable them to address their financial difficulties at an early stage, when it appears likely that their insolvency may be prevented and the continuation of their business assured. A restructuring framework should be available before a debtor becomes insolvent according to national law, i.e. before the debtor fulfils the conditions for entering collective insolvency procedure which entail normally a total divestment of the debtor and the appointment of a liquidator. ~~A test of viability should not therefore be made a pre-condition for entering negotiations and for granting a stay of enforcement actions. Rather, t~~The viability of an enterprise should most often be an assessment to be made by affected creditors who in their majority agree to some adjustments of their claims. However, in order to avoid the procedures being misused, the financial difficulties of the debtor should reflect a likelihood of insolvency and the restructuring plan should be capable of preventing the insolvency of the debtor and ensuring the viability of the business.

Amendment 90 #

Paloma LÓPEZ BERMEJO, Fabio DE MASI, Marisa MATIAS, Matt CARTHY, Miguel VIEGAS

Proposal for a directive
Recital 18

Amendment 91 #

Proposal for a directive
Recital 18

(18) To promote efficiency and reduce delays and costs, national preventive restructuring frameworks should include flexible procedures limiting the involvement of judicial or administrative authorities to where it is necessary and proportionate in order to safeguard the interests of creditors and other interested parties likely to be affected. To avoid unnecessary costs and reflect the early nature of the procedure, debtors should in principle be left in control of their assets and the day-to-day operation of their business. The appointment of a restructuring practitioner, whether a mediator supporting the negotiations of a restructuring plan or an insolvency practitioner supervising the actions of the debtor, should not be mandatory in every case, ~~but~~as such a requirement may not always be relevant, necessary, useful or in the interest of the debtor, especially in straightforward cases with few creditors involved, and may impose a disproportionately high administrative burden on some jurisdictions. Instead, it should be made on a case-by-case basis depending on the specific circumstances of the case or on the debtor's specific needs. Furthermore, there should not necessarily be a court order for the opening of the restructuring process which may be informal as long as the rights of third parties are not affected. Nevertheless, a degree of supervision should be ensured when this is necessary to safeguard the legitimate interests of one or more creditors or another interested party. This may be the case, in particular, when a general stay of individual enforcement actions is granted by the judicial or administrative authority or where it appears necessary to impose a restructuring plan on dissenting classes of creditors.

Amendment 92 #

Proposal for a directive
Recital 18

(18) To promote efficiency and reduce delays and costs, national preventive restructuring frameworks should ~~includ~~be flexible procedures limiting the involvement of judicial or administrative authorities to where it is necessary and proportionate in order to safeguard the interests of creditors and other interested parties likely to be affectedand timely. To avoid unnecessary costs and reflect the early nature of the procedure, debtors should in principle be left in control of their assets and the day- to-day operation of their business. The appointment of a restructuring practitioner, whether a mediator supporting the negotiations of a restructuring plan or an insolvency practitioner supervising the actions of the debtor, should not be mandatory in every case, but made on a case-by-case basis depending on the circumstances of the case or on the debtor's specific needs. Furthermore, there should not necessarily be a court order for the opening of the restructuring process which may be informal as long as the rights of third parties are not affected. Nevertheless, a degree of supervision should be ensured when this is necessary to safeguard the legitimate interests of one or more creditors or another interested party. This may be the case, in particular, when a general stay of individual enforcement actions is granted by the judicial or administrative authority or where it appears necessary to impose a restructuring plan on dissenting classes of creditors.

Amendment 93 #

Proposal for a directive
Recital 18

(18) To promote efficiency and reduce delays and costs, national preventive restructuring frameworks should include flexible procedures limiting the involvement of judicial or administrative authorities to where it is necessary and proportionate in order to safeguard the interests of creditors and other interested parties likely to be affected. To avoid unnecessary costs and reflect the early nature of the procedure, debtors should in principle be left in control of their assets and the day-to-day operation of their business. The appointment of a restructuring practitioner, whether a mediator supporting the negotiations of a restructuring plan or an insolvency practitioner supervising the actions of the debtor, should not be mandatory in every case, but made on a case-by-case basis depending on the circumstances of the case or on the debtor's specific needs. Furthermore, there should not necessarily be a court order for the opening of the restructuring process which may be informal as long as the rights of third parties are not affected. Nevertheless, a degree of supervision should be ensured when this is necessary to safeguard the legitimate interests of one or more creditors or another interested party. This may be the case, in particular, when a general stay of individual enforcement actions is granted by the judicial or administrative authority or where it appears necessary to impose a restructuring plan on dissenting classes of creditors or where all or part of the business is transferred to another undertaking.

Amendment 94 #

Proposal for a directive
Recital 19

(19) A debtor should be able to request the judicial or administrative authority for a temporary stay of individual enforcement actions which should also suspend the obligation to file for opening of insolvency procedures where such actions may adversely affect negotiations and hamper the prospects of a restructuring of the debtor's business. The stay of enforcement could be general, that is to say affecting all creditors, or targeted towards individual creditors. In order to provide for a fair balance between the rights of the debtor and of creditors, the stay should be granted for a period of no more than ~~four~~six months. Complex restructurings may, however, require more time. Member States may decide that in such cases, extensions of this period may be granted by the judicial or administrative authority, providing there is evidence that negotiations on the restructuring plan are progressing and that creditors are not unfairly prejudiced. If further extensions are granted, the judicial or administrative authority should be satisfied that there is a strong likelihood that a restructuring plan will be adopted. Member States should ensure that any request to extend the initial duration of the stay is made within a reasonable deadline so as to allow the judiciary or administrative authorities to deliver a decision within due time. Where a judicial or administrative authority does not take a decision on the extension of a stay of enforcement before it lapses, the stay should cease to have effects on the day the stay period expires. In the interest of legal certainty, the total period of the stay should be limited to twelve months.

Amendment 95 #

Proposal for a directive
Recital 19

(19) A debtor should be able to request the judicial or administrative authority for a temporary stay of individual enforcement actions which should also suspend the obligation to file for opening of insolvency procedures where such actions may adversely affect negotiations and hamper the prospects of a restructuring of the debtor's business. The stay of enforcement could be general, that is to say affecting all creditors, or targeted towards individual creditors. In order to provide for a fair balance between the rights of the debtor and of creditors, the stay should be granted for a period of no more than ~~four~~three months. Complex restructurings may, however, require more time. Member States may decide that in such cases, extensions of this period may be granted by the judicial or administrative authority, providing there is evidence that negotiations on the restructuring plan are progressing and that creditors are not unfairly prejudiced. If further extensions are granted, the judicial or administrative authority should be satisfied that there is a strong likelihood that a restructuring plan will be adopted. Member States should ensure that any request to extend the initial duration of the stay is made within a reasonable deadline so as to allow the judiciary or administrative authorities to deliver a decision within due time. Where a judicial or administrative authority does not take a decision on the extension of a stay of enforcement before it lapses, the stay should cease to have effects on the day the stay period expires. In the interest of legal certainty, the total period of the stay should be limited to ~~twelve~~six months.

Amendment 96 #

Proposal for a directive
Recital 20

(20) To ensure that the creditors do not suffer detriment, the stay should not be granted or, if granted, should not be prolonged or should be lifted when creditors are unfairly prejudiced by the stay of enforcement. In establishing whether there is unfair prejudice to creditors, judicial or administrative authorities may take into account whether the stay would preserve the overall value of the estate, as it could be realised by means of liquidation or would preserve the dividend creditors would receive, whether the debtor acts in bad faith or with the intention of causing prejudice or generally acts against the legitimate expectations of the general body of creditors. A single creditor or a class of creditors would be unfairly prejudiced by the stay if for example their claims would be made substantially worse-off as a result of the stay than if the stay was not granted, or if the creditor is put more at a disadvantage than other creditors in a similar position.

Amendment 97 #

Proposal for a directive
Recital 25

(25) To ensure that rights which are substantially similar are treated equitably and that restructuring plans can be adopted without unfairly prejudicing the rights of affected parties, affected parties should be treated in separate classes which reflect the class formation criteria under national law. As a minimum, secured and unsecured creditors should always be treated in separate classes. National law may provide that secured claims may be divided into secured and unsecured claims based on collateral valuation. National law ~~may~~should also stipulate specific rules supporting class formation where non-diversified or otherwise especially vulnerable creditors, such as workers or small suppliers, would benefit from such class formation. National laws should in any case ensure that adequate treatment is given to matters of particular importance for class formation purposes, such as claims from connected parties, and should contain rules that deal with contingent claims and contested claims. The judicial or administrative authority should examine class formation when a restructuring plan is submitted for confirmation, but Member States could stipulate that such authorities may also examine class formation at an earlier stage should the proposer of the plan seek validation or guidance in advance.

Amendment 98 #

Proposal for a directive
Recital 28

(28) While a restructuring plan should always be deemed adopted if the required majority in each affected class supports the plan, a restructuring plan which is not supported by the required majority in each affected class may still be confirmed by a judicial or administrative authority provided that it is supported by at least one affected class of creditors, representing a majority of the claims, and that dissenting classes are not unfairly prejudiced under the proposed plan (the cross-class cram- down mechanism). In particular, the plan should abide by the absolute priority rule which ensures that a dissenting class of creditors is paid in full before a more junior class can receive any distribution or keep any interest under the restructuring plan. The absolute priority rule serves as a basis for the value to be allocated among the creditors in restructuring. As a corollary to the absolute priority rule, no class of creditors can receive or keep under the restructuring plan economic values or benefits exceeding the full amount of the claims or interests of such class. The absolute priority rule makes it possible to determine, when compared to the capital structure of the enterprise under restructuring, the value allocation that parties are to receive under the restructuring plan on the basis of the value of the enterprise as a going concern.

Amendment 99 #