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Schultze & Braun Ec dr. christoph von Wilcken I www.lawyer-monthly.com

JANUARY 2013

proposals to change insolvency regulations:

Schultze & Braun give us the lowdown

In December, the European Commission published proposals to modernise the European Insolvency Regulation. To find out more and glean exclusive comment, Lawyer Monthly speaks to Dr. Christoph von Wilcken, a lawyer specialising in insolvency law at leading German law firm, Schultze & Braun. Here he highlights the main changes and what impact they may have on Europe’s restructuring industry.

t is intended that businesses hit by the economic crisis will be thrown a lifeline under the new proposals, and otherwise viable businesses will be given a ‘second chance’. The

Commission is proposing to modernise the current rules on cross border insolvency which date from 2002. Benefitting from ten years of experience, the new rules will shift focus away from liquidation and develop a new approach to helping businesses overcome financial difficulties, all the while protecting creditors' right to get their money back.

The new rules will increase the efficiency and effectiveness of cross-border insolvency proceedings, affecting an estimated 50 000 companies across the EU every year. This is a first step towards an

EU "rescue and recovery" culture to help companies and individuals in financial difficulties; this is explored further in a policy communication adopted in parallel today which identifies those areas of national insolvency law which have the greatest potential to create an "unfriendly" business environment and to hamper the development of an efficient insolvency framework in the internal market.

The proposal extends, as expected, the scope of the Regulation to pre-insolvency proceedings, the aim of which is to rescue or reorganize a debtor or bring an adjustment of debt about. In response to this, Christoph commented: ‘Solvent Schemes of Arrangement under the Company Act 2006 could according to