Business Rescue: interim results discussed in Ferrara
From 7-9 September the Annual Conference of the European Law Institute (ELI) was held, this time kindly hosted by the University of Ferrara in Italy. The ELI has adopted a project on the Rescue of Insolvency Law. Professors Bob Wessels and Stephan Madaus, Project Reporters, attended the Annual Conference and discussed current results during two subsequent panel sessions.
Members of the panel were, besides Bob and Stephan, Heinz Vallender (professor at the University of Cologne, retired judge at the District Court of Cologne, heading the Insolvency Department), Mr Arno Metzler is since 2002 member of the European Economic and Social Committee and currently the vice president of a group giving voice to the concerns of the various social, occupational and economic organisations generally and to the liberal professions and SMEs in particular. The third panel member was Matthias Storme, professor at the Catholic University of Leuven and professor at the University of Antwerp. He is a lawyer at the Brussels bar and one of the founding fathers of the European Law Institute.
Panel I: Actors in restructuring and insolvency
There are a number of actors and stakeholders involved in insolvency proceedings at different stages. One of the issues that needs to be addressed, when designing a legal framework that facilitates business rescue, is to define the role of each actor in the process of restructuring and insolvency (mediator, expert, practitioner), these actors’ rights and obligations and the way these professions are selected and appointed (required professional and ethical standards and remuneration).
Panel II: Pre-insolvency frameworks
Under (future) insolvency law in EU Member States, insolvency frameworks will probably include proceedings which promote the rescue of economically viable but distressed businesses outside formal insolvency proceedings. A regulatory framework that can encourage business rescue before a debtor actually is insolvent must be carefully drafted to be capable of covering all different scenarios and respecting all legal rights involved.
The panel introduced and discussed a number of recommendations of the Project Reporters on how the parties involved in pre-insolvency situations can be encouraged to negotiate solutions and how these negotiations can be made efficient and effective and the resulting agreements practicable.