At the end of 2022, the European Commission published a proposal for a Directive under COM(2022) 702 final harmonising certain aspects of insolvency law. The proposal regulates 5 main headings and other sub-issues. The main headings include contestable actions, the search for assets belonging to the bankrupt, the pre-prepared sale of the enterprise in bankruptcy (so called Pre-Pack), the obligation of statutory bodies to file for bankruptcy and their liability and finally the regulation of the insolvency of micro-enterprises.
The Ministry of Justice of the Slovak Republic prepared a preliminary opinion on the proposal and held a working meeting with experts from the academic community and legal practice. After its approval by the minister, it could be commented on in the inter-ministerial comment procedure.
As regards the Pre-Pack institute itself, the fourth title of the proposal (Articles 19 - 35), together with points 21-31 of the preamble, regulates the so-called pre-prepared sale of a going enterprise or its part. The aim of this title is to introduce the Pre-Pack sale of a going enterprise, which is generally considered to be very effective in satisfying creditors' claims, into the legal systems of all member states. Creditors will thus be able to obtain a higher satisfaction than in the case of a sale of assets in parts which no longer form an economically viable unit.
Member states are given the choice to introduce one of two options:
a) Under the first option, a pre-prepared sale of a going enterprise means the preparation and closing of the sale before the formal
commencement of insolvency proceedings under the supervision of the trustee (controller), with the subsequent
commencement of insolvency proceedings and court approval. It is a two-stage procedure, confidential in the first stage [unless
the debtor decides at some point to take advantage of the possibility of temporary protection from creditors under the conditions set
out in Articles 6 and 7 of Directive (EU) 2019/1023, which includes insolvency immunity (both active and passive) as well as
enforcement immunity], and therefore the proposal sets out a number of safeguards to ensure that (all) potential buyers are
approached and that the best market value is selected. The draft directive sets out the conditions for the temporary financing of the
enterprise.
b) According to the second option, a pre-prepared sale of the enterprise means the preparation of the sale prior to the formal
commencement of insolvency proceedings under the supervision of the administrator (controller), with the subsequent
commencement of proceedings and a super-fast sale at public auction (within a period of 4 or maximum 6 weeks). Court approval
is not required. This is a two-stage procedure, confidential in the first stage, unless the debtor decides at some point to make use of
the option of temporary protection from creditors as described in let. a) hereof. The second phase consists of a public auction.
The proposal sets out the conditions for the temporary financing of a company.
We will follow this harmonisation process closely, especially with regard to the Pre-Pack institute, and will provide updates if further developments occur.
