2015 European Insolvency Regulation – What’s new?
The recast European Insolvency Regulation (REGULATION (EU) 2015/848 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 May 2015 on insolvency proceedings) entered into force on 26 June 2015 and will apply to proceedings that are opened from 26 June 2017.
The significant steps in the legislative procedure and a document comparison between the 2002 European Insolvency Regulation and the new 2015 version can be found at http://www.schubra.de/en/internationalaffairs/EIR_Recast_2015.php
As part of our series of newsletters about the significant new features of the European Insolvency Regulation (EIR), in today’s edition we would like to explain the interconnection of national insolvency registers via the European e-Justice Portal.
We hope that you find this interesting reading.
EIR 2015 – The establishment of interconnected insolvency registers:
Preliminary work in connection with the recast EIR showed that when insolvency proceedings are opened in other Member States creditors suffer from a lack of information. This relates not only to knowledge of the proceedings being opened but also to the significant special features of the foreign insolvency law that is applicable. A creditor can thus be taken by surprise by a short time frame to register a claim with limited opportunities for a retrospective claim.
Until now, the Member States had a wide range of options for publishing insolvency proceedings; this was also effected in the respective national language with the result that it was very unreasonable to expect creditors who are faced with, or can be faced with, insolvencies from different Member States to check large numbers of registers and official journals.
On the basis of these findings, the legislature introduced the following provisions in Articles 24 to 27 EIR regarding the establishment and interconnection of insolvency registers.
I. The interconnection of national registers instead of the establishment of a single register
Article 24(1) EIR obliges the Member States to establish and maintain one or several insolvency registers for the publication of the opening of insolvency proceedings. Each Member State will thus have its own insolvency register (or registers) and must establish this register by 26 June 2018.
The European Commission for its part is charged with interconnecting these national registers and setting up an electronic access portal. Specifically, this central access point will be accessible via the European e-Justice Portal. It is thus more a kind of European search engine of the national insolvency registers than a European insolvency register. A search of the insolvency registers of the eight Member States (including Germany) that are currently participating in the pilot project of a network of insolvency registers can already be carried out at https://e-justice.europa.eu/content_interconnected_insolvency_registers_search-246-en.do
The essential information will be available to users free of charge, but Member States may charge a “reasonable fee” for access to additional information and documents.
II. Scope of the information published
- Which types of proceedings are affected?
The obligation to make information publicly available covers insolvency proceedings that are referred to in Annex A of the EIR. For Germany, in practice this means the “Insolvenzverfahren”. This also includes special forms of the standard proceedings such as self-administration proceedings and protective shield proceedings. The appointment of a preliminary insolvency administrator or preliminary supervisor, an appointment that under German insolvency law must be made public, is also covered. Annex B of the EIR, which sets out the insolvency practitioners within the meaning of the Regulation for the individual Member States, refers inter alia to the “Sachwalter” (supervisor), the “vorläufiger Insolvenzverwalter” (preliminary insolvency administrator) and the “vorläufiger Sachwalter” (preliminary supervisor). In this light, Article 1 of the recast EIR specifically provides that its scope includes public interim proceedings.
- Are all proceedings affected or only cross-border insolvency proceedings?
The question arises of whether all proceedings that fulfil the material preconditions are covered by the obligation to publish: According to recital 76 of the EIR relevant information should be published in cross-border insolvency cases. Due to the difficulty – particularly at the time of the opening of proceedings – of distinguishing between purely domestic proceedings and proceedings with a foreign element, it is doubtful whether a limitation of publication to cross-border cases is practicable. This approach would result in difficulties if a foreign element were only to arise retrospectively. Finally, Articles 24 to 27 EIR do not contain a specific limitation to cross-border cases. However, we must await the implementation of the obligation to publish by the Member States that will maintain the relevant insolvency registers.
- What specific information will be made accessible?
Article 24(2) EIR contains a list of mandatory information that all national insolvency registers must include as minimum information. It relates to:
- Information on the decision opening proceedings and on the proceedings: date; court; case reference number; type of proceedings; name and contact data of the insolvency practitioner; time limit for lodging claims; the date of closing proceedings, if any; time limit for legal challenges to the decision opening proceedings;
- Information on the debtor: name and register and registered office for legal persons, and address or place and date of birth for individuals.
III. Limitation of publications in relation to consumers
In principle, the search is carried out by stating the name of the insolvency debtor. However, data protection considerations result in exemptions regarding the publication of insolvency proceedings that concern individuals who do not exercise an independent activity, i.e. consumers. The Member States have the discretion to decide whether and to what extent they will make use of the following restriction options:
On the one hand, the publication of such proceedings can be completely ruled out. In return, in this case foreign creditors must be informed separately about the opening of proceedings. If they are not informed separately, the consequences of the insolvency proceedings do not affect the creditors in question.
On the other hand, the opening of consumer insolvency proceedings may be published but access to this may be made conditional on stating additional search criteria (e.g. the debtor’s date of birth). Access by unauthorized parties would thus be impeded. Applying this alternative, in the European access portal in addition to a simple search by name in all national registers there is the option of an advanced search for each Member State with additional search criteria. Information about certain insolvency proceedings would then only be made accessible within the scope of country-specific searches.
Finally, access to information regarding consumer insolvencies can be made conditional on a request to an authority. This makes it possible to examine whether the party making the request has a legitimate interest.
It remains to be seen whether Germany will make no use of the aforementioned options for restricting the publication of consumer insolvencies. If need be, in addition to stating the debtor’s name the name of the competent court could be required as an additional search criterion, as is already the case when undertaking a detailed search at www.insolvenzbekanntmachungen.de.
Finally, the information obtained relates primarily to insolvency proceedings of companies and entrepreneurial entities that are located in other Member States. The scope of restriction of information relating to consumers is still largely unknown: It is only after all the national insolvency registers have been established and put into operation that the extent to which the Member States have decided to limit access to data on consumers will be apparent.
Ronan Dugué, Attorney at Law in France, Attorney at Law in Germany
Our next newsletter on the EIR 2015 – What’s new? will introduce the data protection provisions
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