JCOERE - Judicial Co-Operation in the European Union: Insolvency and Rescue (original) (raw)

2020, Chapter 9 in Jennifer L. L. Gant (ed), Harmonisation of Insolvency and Restructuring Laws in the EU (INSOL Europe 2020) 107-119

The Preventive Restructuring Directive passed in June 2019 has introduced a number of concepts that are new and untested throughout much of the EU. While the concepts themselves are not unfamiliar, due to their well-known usage in the American Chapter 11 procedure and in other pre-existing frameworks in a number of Member States, many of the new provisions included in the PRD have created a field of controversy and debate among academics, practitioners, and policy makers as legislators begin to work toward implementation by 17 July 2021. The PRD has created fertile ground for these debates, given that there are so many alternatives available within the legislative framework. Consequently, implementing legislation may generate different variations on the approach to corporate rescue and is not expected to yield a harmonised European preventive restructuring culture. These differences may also create difficulties in the coordination of cross-border preventive restructuring procedures by creating potential obstacles to court-to-court cooperation of both a substantive and procedural nature. It is in this issue of cooperation, (enhanced under the EIR Recast) which has been the focus of the JCOERE Project. The JCOERE Project has researched the question as to whether the enhanced obligations imposed on courts and practitioners to co-operate in the EIR Recast5 will be particularly difficult in the context of the introduction of robust preventive restructuring mechanisms derived from the PRD. Within a ‘big picture’ context, the question of cooperation is inextricably linked to the need for mutual trust among jurisdictions and judiciaries, which the European institutions have acknowledged is closely connected to the effectiveness (or not) of European integration generally. Thus, while this Project has focused on what appears to be a narrow area of law in the cross over between the PRD and the EIR Recast in terms of court-to-court cooperation, it interfaces with the some of the fundamental principles necessary to the success of the European project. The purpose ofthis chapter is to provide a snapshot of some of the Project findings to date with a particular focus on a pre-existing robust restructuring process, namely the Irish Examinership procedure,6 which, like the PRD is based (to some extent) on Chapter 11 of the US Bankruptcy Code. This Chapter will begin with a snapshot of the JCOERE Project teasing out some implications connected to the Preventive Restructuring Directive and the cooperation obligations under the EIR Recast against the backdrop of emerging European debates. It will go on to consider how the PRD reflects a range of preventive restructuring processes that already exist in the EU with a particular focus on the Irish Examinership process. When one considers the interface between the PRD and the co-operation obligations in the EIR Recast it should be noted that not all of these processes will be covered by the EIR Recast. In Ireland, for example, there is one process that is specifically included in Annexe A of the EIR Recast (Examinership) and one that is not (Schemes of Arrangement), which is modelled exactly on the UK scheme of arrangement and which has been part of Irish law since at least 1948). The Chapter will continue with a focus on the Irish Examinership process and consider the substantive rules which are part of a robust restructuring framework in light of the 30 years of experience with Examinership in the Irish courts. It will consider these rules in light of significant cases by the Irish courts and this discussion will add to the theoretical debate currently being conducted in Member States regarding implementation of the PRD.