52 Amendments of Tom VANDENKENDELAERE related to 2016/0359(COD)
Amendment 62 #
Proposal for a directive
Recital 1
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 69 #
Proposal for a directive
Recital 5
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
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 73 #
Proposal for a directive
Recital 7
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 workingthe establishment of a Capital Markets Union in particular.
Amendment 74 #
Proposal for a directive
Recital 9
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 77 #
Proposal for a directive
Recital 11
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 Unionfor 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 80 #
Proposal for a directive
Recital 13
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 82 #
Proposal for a directive
Recital 15
Recital 15
Amendment 85 #
Proposal for a directive
Recital 16
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 additionMoreover, 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 94 #
Proposal for a directive
Recital 19
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 foursix 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 97 #
Proposal for a directive
Recital 25
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 mayshould 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
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 103 #
Proposal for a directive
Recital 32
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 109 #
Proposal for a directive
Recital 37
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 111 #
Proposal for a directive
Recital 39
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 113 #
Proposal for a directive
Recital 40
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 119 #
(a) preventive restructuring procedures available for debtors in financial difficulty when there is a likelihood of insolvency, and a possibility of survival;
Amendment 122 #
Proposal for a directive
Article 1 – paragraph 3
Article 1 – paragraph 3
Amendment 124 #
Proposal for a directive
Article 2 – paragraph 1 – point 1
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 129 #
Proposal for a directive
Article 2 – paragraph 1 – point 5
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 134 #
Proposal for a directive
Article 2 – paragraph 1 – point 15 – introductory part
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 carrythat carries out one or more of the following tasks:
Amendment 137 #
Proposal for a directive
Article 2 – paragraph 1 – point 15 – point b
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 140 #
Proposal for a directive
Article 2 – paragraph 1 – point 15 – point c
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 142 #
Proposal for a directive
Article 3 – paragraph 1
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 147 #
Proposal for a directive
Article 3 – paragraph 3
Article 3 – paragraph 3
3. Member States may limit the access provided for in paragraphs 1 and 2 toFor small and medium sized enterprises or entrepreneurs, Member States smhall and medium sized enterprises or to entrepreneursprovide access to professional advice from a restructuring practitioner on a low cost basis.
Amendment 152 #
Proposal for a directive
Article 4 – paragraph 1 a (new)
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)
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 155 #
Proposal for a directive
Article 4 – paragraph 2
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 160 #
Proposal for a directive
Article 5 – paragraph 2
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 166 #
Proposal for a directive
Article 5 – paragraph 3 – introductory part
Article 5 – paragraph 3 – introductory part
3. Member States may requishall ensure the appointment of a practitioner in the field of restructuring in the following cases:
Amendment 172 #
Proposal for a directive
Article 6 – paragraph 1 a (new)
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 178 #
Proposal for a directive
Article 6 – paragraph 3
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 180 #
Proposal for a directive
Article 6 – paragraph 4
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 foursix months.
Amendment 185 #
Proposal for a directive
Article 6 – paragraph 6
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 189 #
Proposal for a directive
Article 6 – paragraph 9
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 196 #
Proposal for a directive
Article 7 – paragraph 3
Article 7 – paragraph 3
3. Member States mayshall 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 200 #
Proposal for a directive
Article 7 – paragraph 6
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
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 204 #
Proposal for a directive
Article 8 – paragraph 1 – point b
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
Article 8 – paragraph 1 – point e
(e) the identity of non-affected partiecreditors 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 210 #
Proposal for a directive
Article 8 – paragraph 2
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 218 #
Proposal for a directive
Article 9 – paragraph 1
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 222 #
Proposal for a directive
Article 9 – paragraph 2
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 mayshall also provide that workers are treated in a separate class of their ownspecific rules supporting separate class formation for otherwise especially vulnerable creditors, such as workers or small suppliers.
Amendment 229 #
Proposal for a directive
Article 9 – paragraph 4
Article 9 – paragraph 4
4. A restructuring plan shall be deemed to be adopted by affected partiecreditors 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 244 #
Proposal for a directive
Article 11 – paragraph 1 – point b
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 255 #
Proposal for a directive
Article 15 – paragraph 4
Article 15 – paragraph 4
Amendment 271 #
Proposal for a directive
Article 23 – paragraph 1
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 singlseparate procedures for the purposes of obtaining a discharge.
Amendment 273 #
Proposal for a directive
Article 23 – paragraph 2
Article 23 – paragraph 2
Amendment 274 #
Proposal for a directive
Article 24 – paragraph 1
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 tohave the expertise and experience at a level appropriate to their responsibilities.
Amendment 275 #
Proposal for a directive
Article 25 – paragraph 1
Article 25 – paragraph 1
1. Member States shall ensure that mediators, insolvency practitioners and other practitioners appointed in restructuring, insolvency and second chance matters receihave the necessary initial and further trainingexpertise 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 280 #
Proposal for a directive
Article 26 – paragraph 3
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
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.