On June 6, 2014, the Council of Ministers backed the Commission’s proposal, which was adopted on December 12, 2012, concerning the intent to modernize the European rules on cross-border insolvency.
In fact, every year in the European context, more than 50 thousands companies are affected by cross – border insolvency proceedings. Specifically one in four bankruptcies in the EU have a cross-border element.
Hence, the aim of the new Regulation is to: (i) facilitate the restructuring of a business in a cross-border context: (ii) help creditors to obtain more likely their money than during liquidation; (iii) increase legal certainty and providing clear rules to determine jurisdiction; (iv) improve information to creditors by obliging Member States to publish key information on insolvency proceedings in electronic registers, publicly accessible via the internet.
The Commission’s proposal will replace the previous European Insolvency Regulation (EC) No. 1346/2000 on insolvency proceedings ( also known as “The Insolvency Regulation”), which has been applying since May 31, 2002.
The new rules proposed by the Commission on 12 December 2012 aim to modernize the Insolvency Regulation by: bringing restructuring procedures within its scope; establishing an interconnection between insolvency registers in all the Member States; proposing a framework to efficiently deal with procedures involving cross-border groups of companies; avoiding the opening of secondary proceedings by taking into account the interests of local creditors in so called synthetic proceedings.
The adoption of the modernized Insolvency Regulation is expected by the end of the year.