Regulation (eu) no. 2015/848 - A means of streamlining insolvency proceedings concerning a debtor whose center of main interests is located within the european union

Author:Anca Roxana Bularca
Position:Senior Lecturer, Ph.D., Faculty of Law, Transilvania University of Brasov
Pages:26-38
SUMMARY

This article aims at presenting the relevant news brought by the Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings 1 , which entered into force on June 26, 2017, thereby repealing Regulation (EC) no. 1346/2002 of May 29, 2000 on insolvency proceedings2. Through the new regulation, the legislator of the European Union has pursued a reform of the previous regulations, which contributes to streamlining the insolvency proceedings taking place in the European Union Member States and which have cross-border effects. The purpose of the analysis is to highlight and contribute to the harmonization of the application of the national insolvency regulations of the Member States of the European Union when the insolvency proceedings are likely to apply different regulations or more regulations. The conclusions of this study may contribute to an improvement in the application of Regulation (EU) No. 2015/848 and / or to an easier understanding.

 
CONTENT
26 ANCA ROXANA BULARCA
REGULATION (EU) NO. 2015/848 - A MEANS
OF STREAMLINING INSOLVENCY PROCEEDINGS
CONCERNING A DEBTOR WHOSE CENTER OF MAIN
INTERESTS IS LOCATED WITHIN THE EUROPEAN UNION *
Author: Anca Roxana BULARCA **
Abstract: This article aims at presenting the relevant news brought by the Regulation (EU)
2015/848 of 20 May 2015 on insolvency proceedings 1 , which entered into force on June 26, 2017,
thereby repealing Regulation (EC) no. 1346/2002 of May 29, 2000 on insolvency proceedings2.
Through the new regulation, the legislator of the European Union has pursued a reform of the
previous regulations, which contributes to streamlining the insolvency proceedings taking place in
the European Union Member States and which have cross-border effects. The purpose of the analysis
is to highlight and contribute to the harmonization of the application of the national insolvency
regulations of the Member States of the European Union when the insolvency proceedings are likely
to apply different regulations or more regulations. The conclusions of this study may contribute to an
improvement in the application of Regulation (EU) No. 2015/848 and / or to an easier
understanding.
Keywords: private law, commercial law, European law, insolvency law
I. Introduction
Any business and activity is defined by risk, that is, the chance of winning or
the possibility of losing, an essential attribute of the free, functional market
economy and which ensures free competition. The business risk also involves
insolvency risk3.
* The article was prepared for the International Law Conference, "Current Issues within EU and
EU Member States: Converging and Diverging Legal Trends", 3rd edition, organized by the Faculty of
Law – Transilvania University of Braşov on the 29th-30th of November 2019. All links were last
accessed on 4 November 2019.
** Senior Lecturer, Ph.D. - Faculty of Law, Transilvania University of Brasov
(ancaroxanabularca@yahoo.com
1 Published in the OJ L141,5.6.2015, p. 19
2 Published in OJ L160, 30.6.2000, p. 1
3 The insolvency status of the debtor is not relevant in terms of insolvency law, but its analysis is
important from the perspective of business risk and insolvency risk, the last notion being increasingly
relevant for the prevention of pre-insolvency and / or insolv ency.
Law Review special issue, Decembre 2019, pp. 26-38
Regulation (EU) no. 2015/848… 27
Generally, commercial transactions act as commutative contracts concluded
with the clear intention of winning, by the contracting parties, while the business
risk is not a condition of validity of the legal act, but only an element without
which the transaction loses its commercial nature.
Failure within transactions concluded may have chain effects on the activity of
a debtor who may become unable to meet his /her obligations towards the
creditors, being obliged to declare insolvency, as its assets are characterized by the
insufficient financial availability for payment of enforceable debts.
The essential element of the insolvency procedure is the state of insolvency 4,
and its occurrence marks the beginning of the period of restriction of the debtor's
rights and arising specific rights for creditors.
Insolvency is an area specific to commercial law, and the procedures
established by the law for the prevention of insolvency and insolvency, are
regulated in our country by a special law, respectively Law no.85/2014, known as
the Insolvency Code5.
Essentially, the Insolvency Code in the matter of business restructuring focuses
on the following rules applicable to all pre-insolvency and insolvency proceedings
in the Member States of the European Union, namely: encouraging insolvency
prevention procedures by laying down the foundations of a legal and business
culture in negotiations; supporting the reorganization procedure, at a rational
economic and balanced level, vis-à-vis a viable and good-faith debtor; in the event
of reorganization failure, the liquidation of the assets can also be done through a
business transfer, with reasonable duration, while asset capitalization is effective.
Given the contemporary European economic context, insolvency is an area
that must be based on the same guidelines in the European Union member states.
At this level, there is a concern to ensure similar insolvency laws for all EU
member states, and their similarity can only result from acquiring common
guiding principles6.
Going beyond the traditionalism of the continental law regarding the
institution of bankruptcy, the opinions that seemed immutable regarding the
"bankruptcy sanction", the American insolvency law has been the inspiration for
the European Union member states legislation.
Pre-insolvency and insolvency proceedings, are today an effective remedy for
the debtor who goes through either a period of financial difficulty or a state of
insolvency.
4 The concept of insolvency is defined by art.5 pt. 29 of Law no.85/2014 on the insolvency
prevention and insolvency procedures, as that state of the debtor's assets characterized by the
insufficiency of the available funds for the payment of certain debts, liquid and enforceable
5 Published in the Official Journal Part I no. 466/25.06.2014
6 See Position of the European Parliament of 5 February 2014, the Council position at first
reading of 12 March 2015 and position of the European Parliament of 20 May 2015
28 ANCA ROXANA BULARCA
Insolvency is a field that merges the economic, the social and the legal issues,
so that implementation of legal norms in this field must be based on logical
reasoning.
As an interdisciplinary discipline, the implementation and the interpretation of
insolvency-related legal norms, by the authorities applying this special procedure,
and also by the parties involved, must be carried out on the basis of principles.
The principles established by the Law no. 85/2014 were based on the
principles of the World Bank, the European Insolvency Principles and the
UNCITRAL Legislative Guide on Insolvency Law.
The principles of the World Bank7 is a tool of action with wide openness, in
order to provide support for countries seeking to improve the legislative
framework, to ensure an increasingly competitive legal system in the commercial
field, to ensure an increasingly safe and predictable investment environment, to
ensure economic growth.
These principles are grouped into 4 chapters, i.e.: legal framework for the
protection of creditors' rights, risk-management rules, legal framework for
insolvency proceedings and institutional regulations.
The European principles on insolvency8 were edited by a group of experts
from the International Insolvency Institute. These experts have shown that these
principles are structured in 14 chapters and contain rules that represent the essence
of European insolvency proceedings, reflecting the characteristics of the laws of the
European Union member states. Thus, these principles highlight rules regarding
the insolvency proceedings in general, the bodies and actors involved in the
procedure, the effects of opening the insolvency procedure, the administration of
the debtor's assets, the duties and remuneration of the insolvency practitioner,
treatment of the creditors' debts, the status of the debtor's employees, the legal
regime of the papers concluded by the debtor, the legal regime of the creditors'
guarantees, the reorganization of the debtor, the administration of the debtor, the
liquidation of the debtor's assets and the closing of the procedure. The purpose of
these principles is stated by the group of experts and consists in the future
adoption of a European Insolvency Code.
The UNCITRAL legislative guide9 includes a selection of the guiding
principles and objectives that any national insolvency law must propose. It
comprises 4 parts. The first two parts were adopted in 2004 and refer to
establishing and enacting the main objectives and the structure of the insolvency
procedure, and the principles governing this procedure. The third part of the guide
was adopted in 2010 and refers to the insolvency of the group of companies. The
7 The World Bank – 2011 Principles for Effective Insolvency and Creditor/Debtor Regimes
http://siteresources.worldbank.org/INTGILD/Resources/ICRPrinciples_Jan2011.pdf
8 http:/www.iiiglobal.org/component/jdownloads/finish/39/405.html
9 http:/www.uncitral.org/uncitral/en/uncitral_texts/insolvency/2004Guide.html
Regulation (EU) no. 2015/848… 29
fourth part of the guide was adopted in 2013 and refers to the responsibility of the
decision-making bodies of the companies in imminent state of insolvency.
The recommended principles10 were enacted to be considered when
implementing the insolvency legislation: inducing a degree of security at the
relevant market level, to promote stability and economic growth; maximizing the
assets and value of the debtor's assets; keeping a balance between bankruptcy and
reorganization; ensuring fair treatment of creditors in the same category; ensuring
an effective opening of the insolvency proceedings within a reasonable time;
creating a legal regime to ensure fair distribution of funds among creditors;
provision of a predictable and transparent legislation; recognizing the rights of
creditors and establishing clear rules for the categories of creditors participating in
the insolvency procedure; establishing a legal framework for cross-border
insolvency.
II. Brief considerations regarding cross-border insolvency from the
perspective of Law no.85 / 2014
The Insolvency Code regulated in Title III Cross-border insolvency, these legal
norms constituting, similar to the regulations in the field of private international
law11, the guide for identifying the law applicable when the insolvency proceeding
involves extraneous elements.
Prior to approaching the concept of cross-border insolvency, we need to
specify that the Insolvency Code defined the notions of foreign court and foreign
procedure, with its forms: main and secondary.
According to art.5 pt.32 of Law no.85/2014, foreign court is defined as the
judicial authority or any other competent authority according to the law of the
State of origin, authorized to open and control or supervise a foreign procedure or
to make decisions during the course of such a procedure.
According to art.5 pt. 49 of Law no.85/2014 the foreign procedure is the
collective, public, judicial or administrative procedure, which is carried out in
accordance with the insolvency legislation of a foreign state, including the
provisional procedure, in which the debtor’s assets and activity are subject to
control or supervision by a foreign court, in order to reorganize or liquidate the
debtor's business.
According to art.5 point 50 of Law no.85/2014 the main foreign procedure is
the foreign insolvency procedure that takes place in the state in which the center of
10 United Commission on International Trade Law, Legislative Guide on Insolvency Law, New York,
2005
11 Book VII - Provisions of private international law in Law no.287/2009 regarding the Civil
Code reissued in the Official Journal Part I no.505/15 07 2011 for the legal norms of material law and
Book VII - the international civil trial in Law no.134/2010 on the Code of civil procedure, reissued in
the Official Journal no.247/10 04 2015
30 ANCA ROXANA BULARCA
the debtor's main interests is located, and according to art.5 point 51 of Law
no. 85/2014 the secondary foreign procedure is the foreign insolvency procedure,
other than the main one, which takes place in the state in which the debtor has
established its headquarters.
Regarding the cross-border insolvency art.273 of the Law no.85/2014 sets out
that the internal regulation includes: rules for determining the law applicable to a
private international law relation in the field of insolvency; procedural rules in
litigation regarding the private international law relations in the field of
insolvency; norms regarding the conditions under which the Romanian competent
authorities request and provide assistance regarding the insolvency proceedings
opened in the territory of Romania or of a foreign state.
We find that the legislator made reference to both the implementation of
material and procedural law rules. In this context we believe that the regulation
contained in art.342 paragraph 1 of the Law no.85/2014 according to which the
provisions of this law are supplemented, to the extent that they do not contravene,
with those of the Code of civil procedure and of the Civil Code, remains
applicable, including those relating to the international proceedings and private
international law.
In terms of insolvency, the private international law relations are the private
law with an extraneous element relations, which are subject to settlement as a
result of the insolvency procedure opening and under the conditions established
by it.
We need to mention that, according to article 342 paragraph 2 of the Law
no.85/2014, the provisions of Chapter I of Title III do not apply to private
international law relations in the field of insolvency that fall under the scope of the
EC Regulation no.1346/2000, repealed by EU Regulation No. 2015/848.
Consequently, the legal rules referred to in the Insolvency Code regarding
cross-border insolvency will be applicable whenever we are not within the scope of
the EU Regulation no. 2015/848, which includes special legal norms applicable to
EU member states only.
Article 4 of the Civil Code and Article 3 of the Code of Civil Procedure,
entitled Priority application of the European Union law, set out the principle according
to which mandatory rules of the European Union law apply as a priority,
regardless of the quality or status of the parties.
As it is well known, the regulation - normative act in the European Union law
is mandatory is directly applicable, without transposition, in the national law of
the European Union member states.
Thus, when the extraneous element comes from the European Union space, in
the matter of cross-border insolvency, the EU Regulation 2015/848 will apply,
while for all the others, the provisions of the Insolvency Code will apply, except
for international treaties or conventions. In this respect, the Regulation (EU)
Regulation (EU) no. 2015/848… 31
no. 2015/848 stipulates that this applies only to the proceedings concerning a
debtor whose center of main interests is located in the Union, and before opening
an insolvency procedure, the competent court must examine ex officio whether the
center of the debtor's main interests or its headquarters are actually located within
its jurisdiction12. In the case of the debtor - legal entity, it is presumed, until the
contrary proof, that the center of its main interests is where the registered office is.
Regulation (EU) No. 2015/848 applies only to proceedings concerning a debtor
whose center of main interests is located within the European Union
The rules of jurisdiction provided for in the Regulation establish only the
international jurisdiction, i.e. designate the Member State whose courts may open
the insolvency proceedings. The territorial jurisdiction within each Member State is
established by the national law.
The competent court of a Member State must carefully check whether the
debtor's main interests are indeed located in that Member State. In the case of a
company, there is the possibility of reversing this presumption, for instance if the
company central administration is located in a Member State other than the one
where the registered office is located and if a comprehensive assessment of all the
relevant factors establishes, in a verifiable manner by third parties, that the actual
company management and supervision office and center of management of its
interests are located in that other Member State. In the case of an individual who
does not carry on an independent commercial or professional activity, this
presumption can be reversed, for example, if most of the debtor's assets are outside
the Member State in which the debtor has its usual residence or in if it can be
established that the main reason of relocation was the opening of insolvency
proceedings before the new court and if such opening could significantly affect the
interests of the creditors whose business with the debtor was conducted before
relocation.
If the specific circumstances give rise to doubts as to the court jurisdiction, it
should ask the debtor to provide additional evidence to support his claims and, if
the law applicable to the insolvency procedure allows it, to confer the debtor s
creditors the opportunity to submit their viewpoints regarding the jurisdiction.
We believe that if the Romanian court, compared to the evidence taken,
considers that it is not internationally competent to apply the debtor's insolvency
procedure, the solution is to dismiss as inadmissible the request, similar to the
situation in which the court would admit the general lack of jurisdiction of the
courts, or of the Romanian courts13.
12 In terms of procedural law this obligation confers efficiency to the provisions of art.131 of the
Code of civil procedure according to which the judge must verify his/her competence, this time the
one at the level of the European Union - international, before fulfilling any other duties
13 See the provisions of art. 132 para. 4 Civil Procedure Code
32 ANCA ROXANA BULARCA
III. Aspects considered relevant in terms of cross-border insolvency from the
perspective of Regulation (EU) no. 2015/848
The enactment of this regulation aimed to make cross-border insolvency
proceedings work efficiently and effectively. Corporate business are increasingly
having cross-border effects and are therefore increasingly regulated in the EU law.
Insolvency of such companies undermines the smooth operation of the domestic
market, as there is a need for a Union act to require supervision of the actions to be
taken regarding the assets of an insolvent debtor.
(EU) Regulation no. 2015/848 was adopted to improve implementation of
some of the provisions of EC Regulation no. 1346/2000 in order to improve the
effective administration of cross-border insolvency proceedings.
Regarding the scope, we show that Regulation (EU) no. 2015/848 applies
exclusively to insolvency court proceedings, a set of special legal norms at the level
of the European Union law, compared to Regulation (EU) no. 1215/201214.
The regulation refers to the concept of confidential insolvency proceedings,
considering that they are not subject to this normative act.
With respect with the scope, we show that Regulation (EU) no. 2015/848
applies to collective and public procedures based on insolvency legislation, which
are aimed at saving, adjusting the debts, restructuring or liquidating the assets of a
debtor in financial distress15. The provisions of the Regulation do not apply to
insurance undertakings16, credit institutions17, investment firms and other
institutions or companies that are the subject of Directive no. 2001/24 /EC 18 and
collective investment bodies.
The scope of this Regulation has been extended to procedures that promote the
rescue of economically viable, but distressed businesses, and which give
entrepreneurs a second chance. This includes rules that refer to the restructuring of
a debtor at a stage where there is only a probability of insolvency, and to rules that
allow the debtor full or partial control of its assets and business. This refers to debt
remittance or adjustment of debts procedures in relation to consumers and
individuals who are self-employed, for instance by reducing the amount payable
14 Regulation (EU) no. 1215/2012 of the European Parliament and of the Council of 12 December
2012 on legal jurisdiction, recognition and enforcement of judgments in civil and commercial matters
(OJ L 351, 20.12.2012, p. 1)
15 According to art.5 paragraph 1 pt. 27 of the Law no.85/2014 the debtor who is in financial
distress is the debtor who, although executes or is able to execute its obligations, has a short term
liquidity degree and / or a high ong-term endebtness degree, which may affect the fulfillment of the
contractual obligations in relation to the resources generated by the operational activity or with the
resources attracted through the financial activity
16 Law no.85/2014 regulates the bankruptcy of credit institutions - articles 204 - 241
17 Law no.85/2014 regulates the bankruptcy of insurance / reinsurance companies - articles 242 - 272
18 Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the
reorganization and liquidation of credit institutions (OJ L125, 5.5.2001, p. 15)
Regulation (EU) no. 2015/848… 33
by the debtor or by extending the payment term granted to it. Given that such
procedures do not necessarily involve the appointment of an insolvency
practitioner, they fall under the regulation if operate under the control or
supervision of a court. In this context, the term control includes situations in which
the court intervenes only following an appeal brought by a creditor or other
interested parties.
The financial distress of the debtor is a patrimonial condition specific to
pre-insolvency of the debtor and is not mistaken for the state of insolvency.
Regulation (EU) no. 2015/848 aimed at clarifying and extending the EC
Regulation no. 1346/2000 in order to apply its regulations both to the insolvency
prevention procedures (agreement with creditors and ad hoc mandate), and to
insolvency procedures, regardless of the stage - judicial reorganization or
bankruptcy19.
The purpose of the regulation is, however, to avoid the parties to be tempted
to transfer assets or legal proceedings from one Member State to another, in an
attempt to obtain a more favorable legal situation to the detriment of the list of
creditors (judicial tourism).
Regulation (EU) no. 2015/848 recommends that in case of relocation of the
center of main interests, creditors should be informed at the right time about the
new place where the debtor carries out its business, for example by drawing
attention to the change of commercial correspondence address or by publicly
announcing the new place by other appropriate means.
Insolvency proceedings do not necessarily imply the intervention of a judicial
authority, each Member State being free to choose the internal insolvency
regulations. Therefore, the term "court", used in the regulation, in certain
provisions, must be understood broadly as including a person or a body
empowered by the national law to open the insolvency proceedings.
Regulation (EU) No. 2015/848 took into account the fact that, due to the major
differences in the national law, introduction of universally applicable insolvency
proceedings throughout the EU is not useful. In this context, application without
exception of the law of the state in which procedures are opened, often leads to
difficulties. For example, in the national laws, the regulations are very different in
terms of guarantees20. In addition, the preferential rights of certain creditors within
insolvency proceedings are, in some cases, completely different. In this respect,
special rules regarding the law applicable to certain rights have been established
and significantly important legal relationships (for example, real rights and
employment contracts).
19 M. Comşa, Regulation on insolvency proceedings, Jurisprudence of the Court of Justice of the
European Union, Universul Juridic Publishing House, Bucharest, 2017, p.281
20 The law-maker of the European Union refers here to the notion of guarantee of obligations,
being known that the international law in civil matters - the civil codes, which complement the
insolvency legislation, have much different concepts and notions, at the level of the Member States, in
relation to the insolvency legislation that is much more convergent
34 ANCA ROXANA BULARCA
Regulation (EU) No. 2015/848 allows the opening of the main insolvency
procedure in the Member State in which the debtor's main interests are located.
These procedures have a universal scope and include all the debtor s assets. For
protecting various interests, the regulation allows the opening of secondary
insolvency proceedings parallel to the main insolvency procedure. Secondary
insolvency proceedings may be opened in the Member State where the debtor has
its headquarters, in accordance with the case law of the Court of Justice of the
European Union. The effects of the secondary insolvency proceedings are limited
to the assets located in the state concerned. Unity within the EU is ensured by
mandatory rules of coordination with the main insolvency procedures.
The insolvency practitioner in the main insolvency procedure or any other
person qualified according to the national law of the respective Member State, may
request the opening of secondary insolvency proceedings.
Regulation (EU) no. 2015/848 provides rules for determining the location of
the debtor's assets, and the rules must be applicable when determining the assets
included in the main or secondary insolvency proceedings or which enter into
situations involving real rights of third parties.
Secondary insolvency proceedings may pursue different purposes, in addition
to protecting the interests of local creditors. There may be cases where the set of
assets subject of the debtor's insolvency is too complex to be administered in whole
or the differences between the respective legal systems are so great that difficulties
may arise due to the extension of the effects deriving from the legislation of the
State opening the proceedings to the other Member States in which the assets are
located. For this reason, the insolvency practitioner within the main insolvency
procedure may request opening of secondary insolvency proceedings for an
efficient management of the insolvency assets.
Secondary insolvency proceedings may also prevent the effective
administration of the assets that are the subject of the main insolvency. The
regulation sets out two specific situations in which the court notified with a request
to open a secondary insolvency procedure should be able to, at the request of the
insolvency practitioner in the main insolvency procedure, defer or refuse to open
such a procedure.
Firstly, the Regulation confers the insolvency practitioner from the main
insolvency procedure the possibility to make a commitment to the local creditors,
according to which they will be treated as if a secondary insolvency procedure had
been opened. This commitment must meet a number of conditions set out in the
regulation, in particular be approved by the most qualified local creditors. If such a
commitment has been made, the court referred with a request to open a secondary
insolvency procedure may refuse the respective application when it considers that
this commitment adequately protects the general interests of the local creditors.
When evaluating these interests, the court should keep in mind that the
commitment has been approved with most qualified local creditors.
Regulation (EU) no. 2015/848… 35
Regarding approval of such a commitment we consider that the national
regulations should be complied with. More specifically, when, on the grounds of
the national law for the approval of a reorganization plan, they should also apply
to approve the commitment. If there are different procedures to adopt
restructuring plans under the national law, Member States should designate a
specific procedure that should be relevant in this context.
Secondly, the Regulation provides for the possibility for the court to
temporarily suspend the opening of the secondary insolvency proceedings, when a
temporary suspension of the individual enforcement proceedings has been granted
within the main insolvency procedure, in order to maintain the efficiency of the
suspension granted in the main insolvency proceedings. The court has the
possibility to grant a temporary suspension if it deems that adequate measures are
in place to protect the general interest of local creditors. In such a case, all creditors
who might be affected by the result of the negotiations on a restructuring plan
should be informed about these negotiations and should be allowed to be
involved.
To ensure actual protection of the local interests, the insolvency practitioner in
the main insolvency procedure may not capitalize or abusively move assets located
in the Member State in which an office is located, in particular, in order to
circumvent the possibility that such interests are effectively satisfied, in the event a
secondary insolvency procedure is opened later.
The main and the secondary insolvency proceedings can contribute to the
efficient management of the assets that are the subject of the debtor's insolvency or
to the efficient capitalization of the assets if there is an adequate cooperation
between the actors involved in all the parallel proceedings. The good cooperation
implies that the various insolvency practitioners and the involved courts cooperate
closely, in particular through a sufficient exchange of information. To ensure the
predominant role of the main insolvency procedure, the insolvency practitioner
within this procedure has available several possibilities to intervene in the
secondary insolvency procedure which is carried out in parallel with the main one.
The insolvency practitioner is able to propose a restructuring plan or an agreement
with creditors or to request suspension of the recovery of assets in the secondary
insolvency procedure. In their cooperation, insolvency practitioners and courts
should consider the best practices for cross-border cooperation in insolvency cases,
as set out in the principles and guidelines for communication and cooperation
adopted by the European and international law enforcement organizations active
in insolvency, in particular the relevant guidelines developed by the United
Nations Commission on International Trade Law (UNCITRAL).
For such cooperation, insolvency practitioners and courts may enter into
agreements and protocols in order to facilitate cross-border cooperation of several
insolvency proceedings from different Member States targeting the same debtor or
companies member of the same group, when this is compatible with the rules
36 ANCA ROXANA BULARCA
applicable to each of the procedures. Such agreements and protocols may have
different forms, in the sense that they may be written or oral, different fields of
application, i.e. vary from general to specific, and may be concluded between
different parties. Simple general agreements may emphasize the need for close
cooperation between the parties without addressing specific issues, while more
detailed, specific agreements can establish a framework of principles that govern
multiple insolvency proceedings and can be approved by the courts involved,
when the national law requires so. They may reflect an agreement between the
parties to take or refrain from certain measures or actions.
Similarly, courts in different Member States can cooperate by coordinating the
appointment of insolvency practitioners. In this context, they may appoint a single
insolvency practitioner for several insolvency proceedings targeting the same
debtor or different member companies of the same group, provided that this joint
appointment is compatible with the rules applicable to each of the proceedings,
and in particular any requirement on the qualification and authorization of
insolvency practitioners.
Regulation (EU) no. 2015/848 ensures the efficient administration of
insolvency proceedings relating to the different companies belonging to a group 21.
Any creditor with its habitual residence, domicile or registered office in the EU
shall have the right to register its application for admission of the receivable on the
debtor's assets in any insolvency proceedings in progress in the European Union.
It is essential that the creditors who have their habitual residence, domicile or
registered office in the Union are informed about the opening of an insolvency
procedure regarding the assets of their debtor. To ensure fast transmission of
information to creditors, Regulation (EC) no. 1393/2007 of the European
Parliament and of the Council22 is not applicable, considering that Regulation no.
2015/848 refers to the obligation to inform the creditors.
Regulation (EU) No 2015/848 provides for the immediate recognition of the
decisions on the opening, conduct and closure of the insolvency procedure that fall
within its scope and of the decisions directly related to this insolvency procedure.
Therefore, automatic recognition means that the effects attributed to the procedure
under the law of the Member State where the procedure was opened extend to all
other Member States. Recognition of judgments made by the courts of the Member
States is based on the principle of mutual trust. For this purpose, the grounds for
non-recognition have been reduced to a minimum.
21 Law no.85/2014 contains special provisions regarding the insolvency of the group of
companies - articles 183 - 203
22 Regulation (EC) no. 1393/2007 of the European Parliament and of the Council of 13 November
2007 on the notification or communication in the Member States of judicial and extrajudicial
documents in civil or commercial matters (notification or communication of acts) and repealing
Regulation (EC) no. 1348/2000 of the Council (OJ L324, 10.12.2007, p. 79)
Regulation (EU) no. 2015/848… 37
Regulation (EU) No. 2015/848 provides for unitary conflict rules, which
replace, within their field of application, the internal rules of private international
law. In the absence of contrary provisions, the legislation of the Member State of
opening (lex concursus) shall apply. This conflicting rule is applicable to both the
main insolvency procedure and the local procedures. Lex concursus determines all
the effects of the insolvency proceedings, both procedural and material, on the
individuals and the relevant legal relationships. It regulates all the conditions
regarding the opening, the progress and the closing of the insolvency procedure.
The automatic recognition of an insolvency procedure to which the law of the
State of the procedure opening is commonly applied may interfere with the rules
governing the transactions in other Member States. To protect the legitimate
expectations and the security of transactions in a Member State other than the state
of opening the procedure, a number of exceptions to the general rule are foreseen.
For example, in the case of real rights, a special derogation from the law of the
state of opening the proceedings was required, because such rights are of
particular importance for granting loans (collaterals for debts). The justification, the
validity and the extent of the real rights is determined by lex situs and it is not
affected by the opening of the insolvency procedure. The holder of a real right may
further capitalize the right to delimit the real guarantee from the assets. If the
assets are subject to the law of the state where they are located, but the main
insolvency procedure takes place in another Member State, the insolvency
practitioner within the main insolvency procedure may request the opening of a
secondary insolvency procedure in the jurisdiction in which the real rights have
arisen, to the extent the debtor has one seat in the respective state. If no secondary
insolvency proceedings are opened, any surplus obtained from the sale of an asset
that is subject to real rights should be paid to the insolvency practitioner in the
main proceedings.
Similarly, to protect the employees and the jobs, the effects of the insolvency
proceedings on the continuation or termination of the employment relationships
and on the rights and obligations of each party arising from these relationships are
determined by the legislation that governs the relevant employment contract in
accordance with the general conflictual rules. Moreover, if termination of the
employment agreements requires the approval of a court or an administrative
authority, the Member State in which the debtor's office is located retains the
power to grant such approval even if no insolvency proceedings have been opened
in that member state. Any other matter related to the insolvency legislation, such
as the protection of employees' claims through preferential rights and the status
that such preferential rights may have, are established by the law of the Member
State in which the insolvency procedure was opened (main or secondary), except
cases in which a commitment has been made, to avoid the secondary insolvency
procedure.
38 ANCA ROXANA BULARCA
For a better information of the creditors and of the courts and to prevent the
opening of parallel insolvency proceedings, Member States are required to publish
the relevant information in cross-border insolvency cases in an electronic publicly
available register23. To facilitate the access of creditors domiciled in another
Member State and of the courts based in another Member State to this information,
the regulation provides the interconnection of such insolvency registers through
the European e-Justice portal. Member States are free to publish relevant
information in several registers and each Member State can interconnect in more
than one register.
IV. Conclusions
In our opinion, Regulation (EU) No. 2015/848 is a much more efficient and
more friendly legal instrument for cross-border insolvency proceedings in the
European Union area, compared to the former regulation. Its regulations are more
clear and more accurate and we believe that they will have a greater application,
being known that under the old regulations there were numerous cross-border
insolvency proceedings that developed exclusively according to the national
insolvency law, avoiding the provisions of the European Union law and due to the
difficulty of their acquiring and implementation.
23 The European Insolvency Proceedings Bulletin which interconnects the national Insolvency
Proceedings Bulletin. According to art.5 pt. 6 of Law no.85/2014, the insolvency proceedings bulletin,
called IPB, is the publication edited by the National Trade Register Office, which aims to publish
summons, convocations, notifications and communications of the procedural documents performed
by the courts, receiver/judicial liquidator after the opening of the insolvency procedure provided by
this law, and of other acts that, according to the law, must be published.