Business Rescue Project
The ultimate aim of this project (initated by the European Law Institute) is to design a framework that will enable the further development of coherent and functional rules for business rescue in Europe.
- Gert-Jan Boon
Background to the project
Since the global financial crisis, insolvency law has been at the forefront of law reform initiatives in Europe and elsewhere. The specific topic of business rescue appears to rank top on the insolvency law related agenda of the EU institutions: with the economic recession of the past few years Europe faced a rapid growth of insolvencies, which clearly highlighted the importance of effective business rescue. Indeed, in 2011 the European Parliament requested the European Commission to submit legislation to enhance the availability of business rescue tools as alternatives to liquidation. The Commission has taken up this idea in various publications and projects. Given the widespread and growing interest in insolvency law and particularly in business rescue, the ELI has resolved that it is an appropriate time for it to engage in a scholarly and detailed assessment of the subject within the European context, and the prospects for reform.
Aim of the project and expected outcomes
The issue of rescue of business lies at the core of this project. The ultimate aim of the project is to design (elements of) a legal framework that will enable the further development of coherent and functional rules for business rescue in Europe. This will include certain statutory procedures that could better enable parties to negotiate solutions where a business becomes financially distressed. Such a framework would include rules to determine in which procedures and under which conditions an enforceable solution can be imposed upon creditors and other stakeholders despite their lack of consent. The project has a broad scope, and will extend to consider frameworks that can be used by (non-financial) businesses out of court, and in a pre-insolvency context.
The project will have several outcomes. The first major outcome will be the production of inventory reports on national insolvency law (of 14 EU countries) by expert national correspondents, and a complementary inventory report on international soft law frameworks for business rescue. Both outputs will be drafted in 2014, and produced in a published volume. The compiled volume will form the basis for a conference in Vienna (March 2015) and the second project outcome: the production by the project reporters of a legislative guide or legislative proposal.
Topics considered in the project
During the course of the project the following topics will be studied:
- Governance and supervision of a rescue in court and ‘out-of-court’;
- Financing a rescue;
- Executory contracts;
- Ranking of creditors, and of the expenses of any Insolvency Office Holder;
- Labour, benefit and pension issues;
- Avoidance powers;
- Sales of substantially all of the debtor’s assets, including going-concern sales;
- Rescue plan issues;
- Multiple enterprise cases/issues;
- Special arrangements for small and medium sized enterprises (SMEs).
The project is coordinated by Professors Bob Wessels and Stephan Madaus, and is directed by Gert-Jan Boon LL.M MSc. The Reporters can be contacted via: firstname.lastname@example.org. For more information, please visit the website of the European Law Institute.