The project “The Contractualised distress resolution in the shadow of the law: Effective judicial review and oversight of insolvency and pre-insolvency proceedings” addresses several key issues highlighted in the Recommendation of 12 March 2014 on a new approach to business failure and insolvency (2014/135/EU). Priority preference of the project is given by JUST/2014/JCOO/AG, Section 2.1 (c) “Exchange of best practices in the field of insolvency and pre-insolvency proceedings”.
The project is carried out by a partnership of several universities: Università degli Studi di Firenze (Project Coordinator), Humboldt-Universität zu Berlin (Partner) and Universidad Autónoma de Madrid (Partner), supported by the Consejo General del Poder Judicial (Associate Partner) and Banca d’Italia (Asscoiate Partner). The partnership benefits from previous personal and working relationships among the key members of the staff, members of the ‘Global Insolvency Task Force’ of the World Bank and of the International Insolvency Institute.
Insolvency law in most jurisdictions is quite general and cannot go into detail on how to resolve a specific issue. Therefore, the law needs to be enriched by the practical experience for those who apply it to distinguish between good and bad cases. The project aims to provide guidance on the application of law for all actors involved.
The key objectives of the project are the following:
- Formulating harmonized guidelines for effective judicial review and oversight of fair and efficient insolvency and pre-insolvency proceedings aimed at rescuing distressed but viable enterprises, with particular focus on proceedings with limited court involvement (‘semi-formal proceedings’).
- Providing guidance on implementation of, and participation in, semi-formal proceedings by debtors, practitioners, lenders and regulatory authorities.
- Creating an empirically rich resource to illuminate national and European policy and legislative debates on the strengthening and harmonization of semi-formal proceedings.
- Facilitating rehabilitation, especially of small and medium enterprises (‘SMEs’), so as to allow entrepreneurs to restart after failure, envisaged by the EU Parliament Resolution of 15-11-2011 on insolvency proceedings (Recital M) and the Communication of 3-3-2010 entitled ‘Europe 2020′ (COM (2010) 2020, Par. 3.1).
- Establishing a restructuring negotiation framework for banks and lenders in general, thereby facilitating efficient management of non-performing loans.
The benefits from the project will be for judicial authorities, national policy-makers and legislators, insolvency regulators and supervisors, banks and bank supervisory authorities, practitioners and scholars.
More information about the project and publications will be published in due course.