The case deals with the pre-pack of Estro, at the time the largest childcare provider in the Netherlands.
A pre-pack entails the court-appointed trustee confidentially preparing for the restart of trading by the insolvent company with the court's consent. If successful, the company is subsequently declared bankrupt and immediately restarted. Dutch law provides that transfer of undertaking rules do not apply in the case of bankruptcy.
The question the ECJ had to answer was essentially whether this exception also applies in the case of a pre-pack. The court observed that the pre-pack is not ultimately aimed at liquidating the company, but rather at preparing a restart of its viable parts. In these circumstances, the ECJ found that it cannot be justified that the employees concerned lose their rights under transfer of undertaking rules. As a result, the ECJ decided that these rules continue to apply in the case of a pre-pack.