What changed between the draft committee report and the plenary report

Changed:Recital 47: (47) In order to protect creditors, this Directive strengthens the provisions concerning creditors’ committees, ensuring fair representation of all categories of creditors, including cross-border creditors, and increased transparency in the decision-making process. It is important to ensure a fair balance between the interests of the debtor and creditors in insolvency proceedings. Creditors’ committees allow for better involvement of creditors in insolvency proceedings, in particular when creditors would otherwise be inhibited from doing so individually, due to limited resources, economic significance of their claims or the lack of geographic proximity. Creditors’ committees can especially help cross-border creditors better exercise their rights and ensure their fair treatment. Member States should allow the establishment of a creditors’ committee once proceedings are opened. A creditors’ committee should be established only provided that creditors agree. Member States may also allow to establish it before proceedings are opened and after the filing for insolvency. In this case, however, Member States should provide that creditors agree to its continuation and composition at the general meeting.

Removed:Recital 51: (51) An important task of the creditors’ committee should be to verify that insolvency proceedings are conducted in a fair and unbiased way that protects creditors’ interests. The committee’s role in the monitoring of the fairness and integrity of the proceedings can only be performed effectively if the creditors’ committee and its members act independently from the insolvency practitioner and are accountable only to the creditors who established it. The members of the creditors' committee should act in good faith when carrying out the functions of the committee. They should maintain the confidentiality of all information obtained in connection with the committee’s activities.

Added:Recital 49: (49) Member States should clarify the requirements, duties and procedures for the appointment of members of the creditors’ committee, as well as the functions attributed to the creditors’ committee. Member States should be given the option to decide whether the appointment should be done by the general meeting of creditors or by the court. To avoid undue delays in the set-up of the creditors’ committee, the members should be appointed expeditiously. Member States should cater for a fair representation of creditors in the committee and ensure that the participation in the creditors’ committee is not precluded to creditors whose claim is not yet admitted or to creditors that are resident in another Member State. Member States should ensure that creditors are fairly represented within the committee. Member States should make sure that workers can be represented in the creditors’ committee when they are creditors.

Removed:Recital 52: (52) Member States should clarify the number of the members in the creditors’ committee and when and how the composition of the committee needs to be altered, which could happen if representatives are no longer able to act, including in the creditors’ best interests, or wish to withdraw. They should also clarify the conditions for the removal of members that acted relentlessly against creditors’ interest or have a conflict of interest.

Added:Recital 50: (50) Fair representation of creditors in the creditors’ committee is particularly important for workers who are creditors and for whom a delay in the payment of wages could pose an existential threat, as well as for unsecured creditors that are micro, small or medium-sized enterprises, which in the case of insolvency of a debtor which is a large enterprise, if not paid promptly, are also exposed to insolvency (domino effect). Proper representation in the creditors’ committee of such creditors could ensure that in the course of the distribution of the recovered proceeds they receive their parts more expeditiously.

Removed:Recital 54: (54) Member States should ensure that the court has the power to determine the working methods for the creditors’ committee, if they have not been established in the committee’s protocol of working methods. The Commission should establish standard working methods that should facilitate the task of the creditors’ committee and reduce the need for courts to intervene in the case of missing working methods.

Added:Recital 51: (51) An important task of the creditors’ committee should be to verify that insolvency proceedings are conducted in a fair and unbiased way that protects creditors’ interests. The committee’s role in the monitoring of the fairness and integrity of the proceedings can only be performed effectively if the creditors’ committee and its members act independently from the insolvency practitioner and are accountable only to the creditors who established it. The members of the creditors’ committee should act in good faith when carrying out the functions of the committee. They should have the power to share relevant and necessary information to represented creditors and to receive information from them. Creditors, members of the creditors’ committee and any professionals employed by the creditors’ committee should maintain the confidentiality of all information obtained in connection with the committee’s activities.

Added:Recital 52: (52) Member States should clarify the number of the members in the creditors’ committee and when and how the composition of the committee needs to be altered, which could happen if representatives are no longer able to act, including in the creditors’ best interests, or wish to withdraw. They should also clarify the conditions for the removal of members that have acted relentlessly against creditors’ interests or that have a conflict of interest.

Added:Recital 54: (54) Member States should ensure that the court has the power to determine the working methods for the creditors’ committee, if they have not been established in the creditors’ committee’s protocol of working methods. The Commission should establish standard working methods that should facilitate the task of the creditors’ committee and reduce the need for courts to intervene in the case of missing working methods.

Removed:Recital 57: (57) To encourage creditors to become members of the creditors’ committee, Member States should limit their individual civil liability when they carry out functions in accordance with this Directive. Nonetheless, members of the creditors’ committee acting fraudulently or with gross negligence, when carrying out those functions, can be removed and held liable for their actions. In those cases, Member States should provide that the members are held individually liable for the detriment caused by their misconduct.

Added:Recital 58: (58) To ensure an enhanced transparency of the key features of national insolvency proceedings and help especially cross-border creditors to estimate what would happen if their investments got involved in insolvency proceedings, investors and potential investors should be granted easy access to that information in a pre-defined, comparable and user-friendly format. A standardised key information factsheet should be prepared and made available to the public by Member States. This document would be key for potential investors to make a “glance-through” assessment of the insolvency proceedings rules in a given Member State. It should contain sufficient explanations to allow the reader to understand the information therein without having to resort to other documents. The key information factsheet should in particular include practical information on the insolvency trigger as well as on the steps to take to request the opening of insolvency proceedings or to lodge a claim. It should be prepared in a multilinguistic format.

Removed:Recital 58: (58) To ensure an enhanced transparency of the key features of national insolvency proceedings and help especially cross-border creditors to estimate what would happen if their investments got involved in insolvency proceedings, investors and potential investors should be granted easy access to that information in a pre-defined, comparable and user-friendly format. A standardised key information factsheet should be prepared and made available to the public by Member States. This document would be key for potential investors to make a “glance-through” assessment of the insolvency proceedings rules in a given Member State. It should contain sufficient explanations to allow the reader to understand the information therein without having to resort to other documents. The key information factsheet should in particular include practical information on the insolvency trigger as well as on the steps to take to request the opening of insolvency proceedings or to lodge a claim. It should be prepared in a multilingual format.

Added:Recital 59 a (new): (59a) This Directive should be without prejudice to the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure pursuant to Directive (EU) 2016/943 of the European Parliament and of the Council1a. / 1a Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets).

Added:Article 1 – paragraph 1 – introductory part: 1. In order to maximise legal certainty concerning the value of companies, to improve the efficiency of insolvency proceedings both in terms of cost and length, to improve predictability and to ensure a fair distribution of value among creditors, this Directive lays down common rules on:

Changed:Article 2 – paragraph 1 – point g: (g) ‘executory contract’ means a contract between a debtor and one or more counterparties under which the parties still have obligations to perform at the time of the opening of insolvency proceedings in the liquidation phase in Title IV, but does not include financial contracts, in particular netting agreements;

Removed:Article 2 – paragraph 1 – point q – subparagraph 2 – point ii: (ii) ascendants, descendants, and siblings of the debtor, or of the spouse or partner of the debtor, and the spouses or partners of these persons;

Removed:Article 2 – paragraph 1 – point q – subparagraph 2 – point iv: (iv) persons who are working for the debtor under a contract of employment with access to non-public information on the affairs of the debtor;

Removed:Article 2 – paragraph 1 – point q – subparagraph 2 – point v: (v) legal entities in which the debtor or one of the persons referred to in points (i) to (iv) of this subparagraph is a member of the management or supervisory bodies or performs duties which provide for access to non-public information on the affairs of the debtor.

Removed:Article 2 – paragraph 1 – point q – subparagraph 3 – point i: (i) any member of the management or supervisory bodies of the debtor;

Removed:Article 3 a (new): Article 3a / National law and minimum harmonisation / 1. Member States may adopt or maintain laws which provide for a greater level of protection for the general body of creditors than that provided for under Titles II, IV, and VII, provided that they comply with Union law. / 2. Member States may adopt or maintain laws which facilitate access by insolvency practitioners to bank account information held in their bank account registers, beneficial ownership information and national registers and databases to a greater extent than the rules provided for in Title III.

Added:Article 3 – title: Party closely related to the debtor

Added:Article 3 – paragraph -1 (new): -1. For the purposes of this Directive, parties closely related to the debtor shall include: / (a) where the debtor is a natural person: / (i) the spouse or partner of the debtor; / (ii) ascendants, descendants, and siblings of the debtor, or of the spouse or partner of the debtor, and the spouses or partners of these persons; / (iii) persons living in the household of the debtor; / (iv) persons who are working for the debtor under a contract of employment with access to non-public information on the affairs of the debtor; / (v) legal entities in which the debtor or one of the persons referred to in points (i) to (iv) of this subparagraph is a member of the management or supervisory bodies or performs duties which provide for access to non-public information on the affairs of the debtor; / (b) where the debtor is a legal entity: / (i) any member of the management or supervisory bodies of the debtor; / (ii) equity holders with a controlling interest in the debtor; / (iii) persons which perform functions similar to those performed by persons under point (i); / (iv) persons which are closely related in accordance with the second subparagraph to the persons listed in points (i), (ii) and (iii) of this subparagraph.

Added:Article 3 – paragraph 1 a (new): 1a. Paragraph -1 and paragraph 1, point (a), of this Article shall apply mutatis mutandis to the concept of persons closely related to parties which have benefitted from a void, voidable or unenforceable legal act as referred to in Article 11(2), second subparagraph.

Added:Article 3 a (new): Article 3a / National law and minimum harmonisation / 1. Member States may adopt or maintain laws which provide for a greater level of protection for the general body of creditors than that provided for under Titles II, IV and VII, provided that they comply with Union law. / 2. Member States may adopt or maintain laws which facilitate access by insolvency practitioners to bank account information held in their bank account registers, beneficial ownership information and national registers and databases to a greater extent than the rules provided for in Title III. / 3. Member States shall ensure that, when insolvent, microenterprises have access to insolvency proceedings in situations where the debtor has no assets or its assets are not sufficient to cover the cost of the proceedings or the cost for the involvement of the insolvency practitioner. / 4. Member States may adopt or maintain laws which establish simplified winding-up proceedings for microenterprises.

Added:Article 3 b (new): Article 3b / Protection of workers / This Directive is without prejudice to the application of national labour law and Union law with regard to workers’ rights, in particular Council Directives 98/59/EC1a and 2001/23/EC1b and Directives 2002/14/EC1c, 2009/38/EC1d, (EU) 2016/23411e and 2008/94/EC1f of the European Parliament and of the Council. / This Directive shall not prevent Member States from introducing or maintaining provisions relating to Title IV which provide for a greater level of protection for workers or their representatives. / 1a Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies (OJ L 225, 12.8.1998, p. 16, ELI: http://data.europa.eu/eli/dir/1998/59/oj). / 1b Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses (OJ L 82, 22.3.2001, p. 16, ELI: http://data.europa.eu/eli/dir/2001/23/oj). / 1c Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community (OJ L 80, 23.3.2002, p. 29, ELI: http://data.europa.eu/eli/dir/2002/14/oj) . / 1d Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in…

Added:Article 4 – paragraph 1 a (new): Member States may adopt or maintain rules that establish that, where a legal act requires registration in a public register for its perfection, the point in time from which the legal act is considered perfected can exceptionally be before the date on which the registration takes place.

Changed:Article 6 – paragraph 3 – subparagraph 1 – point c a (new): (ca) the entering into netting arrangements, including close-outwhere netting,relevant, in financialaccordance markets,with energynational marketslaw, orlegal otheracts commoditythe marketspurpose asof wellwhich asis legalto actssatisfy supportingor thecollateralise operationclaims ofby suchsocial arrangements.security authorities.

Added:Article 6 – paragraph 3 – subparagraph 1 – point c b (new): (cb) the entering into netting arrangements, including close-out netting, in financial markets, energy markets or other commodity markets as well as legal acts supporting the operation of such arrangements.

Changed:Article 7 – paragraph 1: 1. Member States shall ensure that legal acts of the debtor against no or manifestly inadequate consideration are void, voidable or unenforceable where they were perfected within a time period of one year prior to the submission of the request for the opening of insolvency proceedings or, in the absence of a formal request, prior to the date on which a resolution to commence insolvency proceedings had been made. The payment of a third-party debt in a three-person relationship shall not be automatically considered as a legal act against no or manifestly inadequate consideration. / Member States may provide that the fact that the enrichment resulting from a void legal act is no longer the property of the party which benefited from that legal act can be invoked if that party was not aware of the circumstances on which the avoidance action is based.

Added:Article 8 – paragraph 1 – subparagraph 2: The knowledge referred to in the first subparagraph, point (b), shall be presumed if the other party to the legal act was a party closely related to the debtor. That presumption shall be rebuttable.

Changed:Article 9 – paragraph 2 – subparagraph 1: Member States shall ensure that the party which benefitted from the void, voidable or unenforceable legal act is obliged to compensate in full the insolvency estate concerned for the detriment caused to creditors by that legal act. The fact that the enrichment resulting from the void, voidable or unenforceable legal act is not available anymore in the property of the party which benefited from that legal act (‘lapse of enrichment’) can only be invoked if that party was not aware of the circumstances on which the avoidance action is based.

Added:Article 17 – paragraph 2 – point a a (new): (aa) for beneficial owners of legal entities, the nature and extent of the beneficial interest held;

Added:Article 17 – paragraph 2 – point a b (new): (ab) for beneficial owners of express trusts or similar legal arrangements, the nature of their beneficial ownership.

Changed:Article 18 – paragraph 2 a (new): 2a. Member States shall communicate the lists of the national registers and databases referred to in the Annex to the Commission by…[ 63 months from the date of entry into force of this Directive]. Member States shall immediately notify the Commission of any changes thereto. The Commission shall publish those lists on the European e-Justice portal.

Changed:Title III – Chapter 3 a (new): Chapter 3a / Access to courts by insolvency practitioners of another Member State / Article 18a / Access to courts by insolvency practitioners of another Member State / With respect to the right to initiate proceedings or appear before courts in order to claim assets on behalf of the insolvency estate, each Member State shall ensure that insolvency practitioners appointed in another Member State are not subject to conditions that are less favourable than those applicable to the insolvency practitioners appointed in that Member State.

Removed:Article 18 a (new): Article 18a / Access to courts by insolvency practitioners of another Member State / With respect to the right to initiate proceedings or appear before courts or authorities in order to claim assets on behalf of the insolvency estate, each Member State shall ensure that insolvency practitioners appointed in another Member State are not subject to conditions that are less favourable than those applicable to the insolvency practitioners appointed in that Member State.

Added:Article 19 – paragraph 1 – introductory part: 1. Member States shall introduce pre-pack proceedings for situations in which the debtor is likely to become insolvent in accordance with national law. Member States shall ensure that pre-pack proceedings are composed of the following two consecutive phases:

Changed:Article 19 – paragraph 12: –2. introductoryPre-pack part:proceedings 1.shall Membercomply Stateswith shallthe introduceconditions pre-packset proceedingsout in situationsthis whereTitle. theAs debtorregards isall inother amatters, situationincluding ofthe likelihoodranking of insolvencyclaims inand accordancethe withrules nationalon law.distribution of proceeds, Member States shall ensureapply thatnational pre-packprovisions proceedingson arewinding-up composedproceedings, ofprovided thethat followingthey twoare consecutivecompatible phases:with Union law.

Removed:Article 19 – paragraph 2: (deleted)

Added:Article 19 a (new): Article 19a / Rights of workers / The pre-pack proceedings are without prejudice to Union and national law on the rights of workers in insolvency proceedings, including the involvement of workers’ representatives and appropriate measures to inform and consult workers’ representatives. / While applying this Title, Member States shall ensure that the impact on workers is taken into account as much as possible, with a view to preserving employment.

Removed:Article 22 – paragraph 1 – subparagraph 1: Member States shall provide that, upon request of the debtor, the court appoints a monitor. The monitor shall be independent from the debtor, the debtor’s shareholders, the creditors and any other party having a legal or economic interest in the debtor or the debtor’s business.

Added:Article 20 – paragraph 2: 2. For the purposes of Article 5(1) of Council Directive 2001/23/EC40, the liquidation phase shall be considered to be bankruptcy or insolvency proceedings instituted with a view to the liquidation of the assets of the transferor under the supervision of a competent public authority, provided that the liquidation of the debtor’s business as a going concern satisfies to the greatest extent possible the claims of the creditors.

Added:Article 22 – paragraph 1 – subparagraph 1: Member States shall provide that, upon request of the debtor, the court appoints a monitor. The monitor shall be independent of the debtor, the debtor’s shareholders, the creditors and any other party having a legal or economic interest in the debtor or the debtor’s business.

Added:Article 22 – paragraph 2 – subparagraph 1 – point a a (new): (aa) where appropriate, has recourse to an independent valuation in order to comply with requirements related to obtaining market value;

Added:Article 22 – paragraph 2 – subparagraph 1 – point b: (b) formally declares and demonstrates that the sale process is competitive, transparent, fair and meets market standards;

Added:Article 22 – paragraph 2 – subparagraph 1 – point d: (d) formally declares and demonstrates that the best bid does not constitute a manifest breach of the best-interest-of-creditors test.

Added:Article 24 – paragraph 2: 2. Without prejudice to Article 32(2), where the sale process only produces one binding offer, that offer shall be deemed to reflect the business market price, unless it can be demonstrated otherwise.

Added:Article 24 – paragraph 3: 3. Member States may depart from paragraph 1 only where the court runs a public auction in the liquidation phase in accordance with Article 26(2). In this case, Article 22(2), point (b) shall not apply.

Added:Article 24 – paragraph 3 a (new): 3a. Member States shall ensure that it is possible, in the course of the preparation phase, to obtain the services of an independent valuation practitioner as a means of gauging a fair market price.

Removed:Article 27 – paragraph 1 – subparagraph 1: Member States shall ensure that the acquirer of the debtor’s business or part thereof is assigned the executory contracts which are necessary for the continuation of the debtor’s business and the suspension of which would lead to a business standstill. The assignment shall not require the consent of the debtor’s counterparty or counterparties unless the court considers that such consent is necessary in order to protect the interests of the debtor's counterparties.

Added:Article 26 – paragraph 2: 2. By way of derogation from paragraph 1, Member States shall ensure that the court can run a public auction where one or more creditors’ groups demonstrate a credible suspicion of abuse. The offer selected by the monitor shall be used as the initial bid in the public auction. Member States shall ensure that the protections granted to the initial bidder in the preparation phase, such as expense reimbursement or break-up fees, are commensurate and proportionate, and do not deter potentially interested parties from bidding in the liquidation phase.

Added:Article 27 – paragraph 1 – subparagraph 1 a (new): By way of derogation from the first subparagraph, Member States may provide that consent of the debtor’s counterparty or counterparties is required in so far as is necessary, depending on the type of contract, the legal status of the parties or the interests of the business.

Added:Article 27 – paragraph 2 – subparagraph 1 – introductory part: 2. Member States shall ensure that the court may decide to terminate the executory contracts referred to in paragraph 1, first subparagraph, subject to a notice period of at least three months prior to the assignment, provided that one of the following conditions applies:

Changed:Article 31 – paragraph 1: Member States shall ensure that the monitor and the insolvency practitioner are liable for the damages that their intentional or grossly negligent failure to comply with their obligations under this Title causes to creditors and third parties affected by the pre-pack proceedings.

Added:Article 32 – paragraph 1 – subparagraph 2: Member States shall provide that where it is proved that the disclosure duty referred to in the first subparagraph, point (a), was breached, the court revokes the benefits referred to in Article 28.

Added:Article 32 – paragraph 2: 2. Where the offer made by a party closely related to the debtor is the only existing offer, Member States shall introduce additional safeguards for the authorisation and execution of the sale of the debtor’s business or part thereof. These safeguards shall at least include the requirement to obtain a market valuation of the business and the duty for the monitor and the insolvency practitioner to reject the offer from the party closely related to the debtor if the offer does not satisfy the best-interest-of-creditors test.

Changed:Article 36 – paragraph 1: 1. Member States shall ensure that, where a company becomes insolvent in accordancelegal withentity nationalbecomes law,insolvent, its directors have the duty to submit a request for the opening of insolvency proceedings with the court no later than 3 months after the directors became aware or can reasonably be expected to have become aware that the legal entity is insolvent.insolvent in accordance with national law. Preventive restructuring proceedings are be excluded from that obligation.

Removed:Article 37 – paragraph 1: 1. Member States shall ensure that the insolvent company’s directors are liable for damages incurred by creditors as a result of their failure to comply with the obligation laid down in Article 36.

Added:Article 36 – paragraph 1 a (new): 1a. By way of derogation from paragraph 1, Member States may provide that the duty referred to therein does not apply to directors who are natural persons and are personally liable for all of the company’s debts where: / (a) the directors inform the public of the company’s insolvency through a notification in a public register, at the latest within the deadline referred to in paragraph 1, in order to ensure that the creditors are able to request the opening of insolvency proceedings; or / (b) the directors take measures that are designed to avoid damage to the creditors of the insolvent company, provided that such measures were reasonably likely to avoid such damage or secure a better outcome for creditors.

Added:Article 37 – paragraph 1: 1. Member States shall ensure that the insolvent legal entity’s directors are liable for damages incurred by creditors as a result of their failure to comply with the duty laid down in Article 36.

Added:Article 37 – paragraph 2 a (new): If Member States have exercised the option provided for in Article 36(1a), they shall ensure that directors who take measures as referred to therein are liable, in accordance with national law, for damage caused to creditors that would not otherwise have been caused had the opening of insolvency proceedings been requested in accordance with Article 36(1).

Added:Article 37 – paragraph 2 b (new): Member States may provide that such liability is excluded where and to the extent that the directors can demonstrate, on the basis of objective circumstances, that the measures taken could reasonably be expected to avoid damage to creditors, provided that such measures were reasonably likely to avoid such damage or secure a better outcome for creditors.

Removed:Article 59 – paragraph 1: 1. Member States shall ensure that the members of the creditors’ committee are appointed either at the general meeting of creditors or by decision of the court, within 30 days from the date of the opening of the insolvency proceedings.

Added:Article 58 – paragraph 3: 3. Member States may exclude in national law the possibility to establish a creditors’ committee in insolvency proceedings, when, due to the nature and scope of the debtor’s business, the overall costs of the involvement of such a committee are not justified in view of the low economic relevance of the insolvency estate, of the low number of creditors or the circumstance that the debtor is a microenterprise.

Added:Article 59 – paragraph 1: 1. Where a creditors’ committee is established pursuant to Article 58, Member States shall ensure that the members of the creditors’ committee are appointed either at the general meeting of creditors or by decision of the court, within 30 days from the date of the opening of the insolvency proceedings.

Added:Article 59 – paragraph 3 – subparagraph 1 a (new): When workers are among the creditors, Member States shall ensure that the creditors’ committee can include members who are workers or their representatives. Individuals who are not themselves creditors may also be appointed as members of the creditors’ committee only if they represent the interests of a group of creditors.

Changed:Article 64 – paragraph 1 – subparagraph 2 – point e: deleted(e) the power to share relevant and necessary information to represented creditors and to receive information from them;

Changed:Article 64 – paragraph 1 – subparagraph 2 a (new): Member States shall ensure that creditors, members of the creditors’ committee and any professionals employed by the creditors’ committee maintain the confidentiality of all information obtained in connection with the committee’s activities.

Removed:Article 70 – paragraph 1: By ... [3 years after the deadline for transposition of this Directive], the Commission shall present to the European Parliament, the Council and the European Economic and Social Committee a report on the application and impact of this Directive.

Added:Article 69 a (new): Article 69a / Supporting measures / To address the difficulties of SMEs and microenterprises in particular, and their need for additional supporting measures in the event of insolvency and financial distress, the Commission shall support the exchange of best practices between Member States and provide guidance on that basis and on the basis of exchanges with SME representatives.

Added:Article 70 – paragraph 1: By [3 years after the deadline for transposition of this Directive] and every 5 years thereafter, the Commission shall present to the European Parliament, the Council and the European Economic and Social Committee a report on the application, impact and its effectiveness in reaching the objectives of this Directive. The report may be accompanied, if appropriate, by a legislative proposal.

Changed:Recital 10: (10) New financing or interim financing provided during a restructuring attempt, including in the course of a preventive insolvency procedure under Title II of Directive (EU) 2019/1023 of the European Parliament and of the Council33 ,Council33, should be protected in subsequent insolvency proceedings. Consequently, avoidance actions on the ground of preferences should not be permitted against payments to or collateralisation in favour of the providers of such new- or interim financing, if those payments or collateralisations are performed in accordance with the claims of the providers. Such payments or collateralisation should be considered, therefore, as legal acts performed directly against fair consideration to the benefit of the insolvency estate.

Changed:Recital 17: (17) Directive (EU) 2024/1640 providesof thatthe European Parliament and of the Council34 provides that centralised automated mechanisms, such as central registers or central electronic data retrieval systems, are interconnected via BARIS, which is to be developed and operated by the Commission. Considering the growing importance of insolvency cases with cross-border implications and the importance of relevant financial information for the purposes of maximising the value of the insolvency estate in insolvency proceedings, the designated courts or administrative authorities should be able to access and search the bank account registers of other Member States directly through BARIS. / (deleted)34 OJ L, 2024/1640, 19.6.2024, ELI: http://data.europa.eu/eli/dir/2024/1640/oj.

Removed:Article 2 – paragraph 1 – point b: (b) ‘court’ means: / (i) for the purposes of Title IV, with the exception of Article 21, Title V and Title VII, with the exception of Article 59(5), a judicial body of a Member State or the authority of a Member State competent for insolvency proceedings; / (ii) for the purposes of all other articles, a judicial body of a Member State;

Added:Article 2 – paragraph 1 – point b: (b) ‘court’ means:

Added:Article 2 – paragraph 1 – point b – point i (new): (i) for the purposes of Article 18a, Title IV, with the exception of Article 21, Title V and Title VII, with the exception of Article 59(5), a judicial body of a Member State or the authority of a Member State competent for insolvency proceedings;

Added:Article 2 – paragraph 1 – point b – point ii (new): (ii) for the purposes of all other articles, a judicial body of a Member State;

Changed:Article 2 – paragraph 1 – point d: (d) bank‘bank account registers’registers ’ means centralised automated mechanisms, such as central registries or central electronic data retrieval systems, put in place in accordance with Article 16(1)16 (1) of Directive (EU) 2024/1640; / (This amendment applies throughout the text. Adopting it will necessitate corresponding changes throughout.)

Changed:Article 2 – paragraph 1 – point q: (q)deleted ‘party/ closely(deleted) related/ to(deleted) the/ debtor’(deleted) means:/ (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

Changed:Article 6 – paragraph 1 – subparagraph 1 – point a: (a) within three months prior to the submission of the request for the opening of insolvency proceedingsproceedings, or, in the absence of a formal request, prior to the date of the resolution to commence insolvency proceedings, provided that the debtor was unable to pay its mature debts under national law; or

Changed:Article 6 – paragraph 1 – subparagraph 1 – point b: (b) after the submission of the request or the date of the resolution referred to in point (a) and before the opening of insolvency proceedingsproceedings.

Changed:Article 6 – paragraph 2 – subparagraph 1 – introductory part: If a due claim of a creditor was satisfied or secured in the owed manner, Member States shall ensure that the legal act isare void, voidable or unenforceable only if:

Added:Article 9 – paragraph 2 – subparagraph 2: The fact that the enrichment resulting from the void, voidable or unenforceable legal act is not available anymore in the property of the party which benefited from that legal act (‘lapse of enrichment’) can only be invoked if that party was not aware of the circumstances on which the avoidance action is based.

Changed:Article 11 – paragraph 1: 1. Member States shall ensure that ArticleArticles 9 and 10 are applicable to an heir or another universal successor of the party which benefitted from the void, voidable or unenforceable legal act.

Changed:Title III – Chapter 1I – title: Access to bank account information by designated courts and administrative authorities

Changed:Article 13 – paragraph 1: 1. Each Member State shall designatedesignate, the courts or administrative authorities that are empowered to access and search bank account registers.registers

Changed:Article 13 – paragraph 2: 2. Each Member State shall notify the Commission of its designated courts or administrative authorities by ... [3 months from transposition date], and shall immediately notify the Commission of any amendment thereto. The Commission shall publish the notifications in the Official Journal of the European Union and on the European e-Justice Portal.

Changed:Article 14 – paragraph 1: 1. Member States shall ensure that, upon request of the insolvency practitioner appointed in ongoing insolvency proceedings, including interim proceedingsproceedings, the designated courts or administrative authorities have the power to access and search, directly and immediately, bank account information, where necessary for the purposes of identifying and tracing assets belonging to the insolvency estate of the debtor in that proceedings, including those subject to avoidance actions.

Changed:Article 14 – paragraph 3: 3. The additional information that Member States consider essential and include in the bank account registers pursuant to Article 16(5) of Directive (EU) 2024/1640 shall not be accessible or searchable by designated courts or administrative authorities.

Removed:Article 17 – paragraph 2 – point b a (new): (ba) for beneficial owners of legal entities, the nature and extent of the beneficial interest held;

Removed:Article 17 – paragraph 2 – point b b (new): (bb) for beneficial owners of express trusts or similar legal arrangements, the nature of their beneficial ownership.

Changed:Article 34 – paragraph 1 a-1 (new): 1a.-1. Member States shall ensure that, prior to the authorisation of the sale of the debtor’s business or part thereof, the insolvency practitioner provides the court with a report on a favourable best-interest-of-creditors test.

Changed:Article 63 – paragraph 2 – point -a (new): (-a) the scope of the creditors'creditors’ committee'scommittee’s duties;

Changed:Article 66 – paragraph 1 a1a (new): Expenses for liability insurance covering the liability of members of the creditors’ committee shall be borne by the insolvency estate in accordance with Article 65(2).

Changed:Annex I – subheading 1:title: National registers and databases referred to in Article 18

Changed:Annex I – point 6: 6. Registers or databases containing information on the ownership of securities, such as central securities depositoriesdepositories, as defined in Article 2(1), point (1),2 of Regulation (EU) No 909/2014;

Changed:Recital 8: (8) In the context of avoidance actions, a distinction should be made between legal acts where the claim of the counterparty was due and enforceable and has been satisfied in the owed manner (congruent coverages) and those where performance was not entirely in accordance with the creditor’s claim (incongruent coverage). Incongruent coverages include, in particular, premature payments, the satisfaction with unusual means of payments, the subsequent collateralisation of a so far unsecured claim which was not already agreed upon in the original debt agreement, granting an extraordinary termination right or other amendments not provided for in the underlying contract, the waiver of legal defences or objections or the acknowledgement of disputable debts. In the case of congruent coverages, the avoidance ground of preferences can only be invoked if the creditor of the void, voidable or unenforceable legal act knewthat knew, at the time of the transactiontransaction, that the debtor was insolvent.

Changed:Recital 12: (12) Parties who are closely related to the debtor, such as relatives in case the debtor is a natural person or actors fulfilling decisive roles in relation to a debtor that is a legal entity, usually enjoy an information advantage with regard to the financial situation of the debtor. In order to prevent abusive behaviours, additional safeguards should be established. Consequently, in the context of avoidance actions, legal presumptions about the knowledge of the circumstances on which the conditions for avoidance were based should be introduced when the other party involved in the void, voidable orand unenforceable legal act is a party closely related to the debtor. These presumptions should be rebuttable and should aim at reversing the burden of proof to the benefit of the insolvency estate.

Changed:Recital 16: (16) In order to respect the right to the protection of personal data and the right to privacy, direct and immediate access to bank account registers should be granted to courts or administrative authorities that are designated by the Member States for that purpose. Insolvency practitioners should therefore be allowed to access information held in the bank account registers indirectly by requesting the designated courts or administrative authorities in their Member State to access the bank account registers and perform the searches. Member States should be able to designate different courts or administrative authorities for the purpose of accessing bank account registers domestically or cross-borderacross borders through the bank account registers interconnection system (BARIS) referred to in Directive (EU) 2024/1640 of the European Parliament and of the Council1a. Member States should be also able to provide that courts or authorities other than the courts or administrative authorities designated under this Directive verify the conditions for accessing and searching bank account information. Access to bank account information should be granted only on a case-by-case basis, where relevant to specific insolvency proceedings for the purpose of identifying and tracing assets belonging to the insolvency estate, as well as assets subject to avoidance actions. However, Member States should be able to adopt or maintain national rules that allow insolvency practitioners to directly access and sear…search thei…

Changed:Recital 17 a (new): (17a) Access by the courts or administrative authorities designated under this Directive to bank account information across borders through BARIS is based on the mutual trust among Member States derived from their respect of fundamental rights and of the principles recognised by Article 6 of the Treaty on European Union (TEU) and by the Charter of Fundamental Rights of the European Union (‘the(the Charter’),‘Charter’), as well as the fundamental rights and principles provided for in international law and international agreements to which the Union or all the Member States are party, including the European Convention for the Protection of Human Rights and Fundamental Freedoms, and in Member States’ constitutions, in their respective fields of application. The power to access and search bank account information through BARIS pursuant to this Directive should be exercised in compliance with Union and national rules, as well as national procedural safeguards on the protection of personal data.

Changed:Recital 19: (19) Directive (EU) 2024/1640 ensures that persons with a legitimate interest are granted access to beneficial ownership informationinformation, in accordance with data protection rules. For the purpose of tracing assets in the context of ongoing insolvency proceedingsproceedings, insolvency practitioners should be granted access in a timely manner to specific categories of beneficial ownership information, such as on the name, month and year of birth and the country of residence and nationality of the beneficial owner, as well as the nature and extent of beneficial interest held. At the same time, the scope of data directly accessible by the insolvency practitioners could be broader than the scope of data accessible by other parties having a legitimate interest. / (deleted)

Changed:Article 2 – paragraph 1 – point a: (a) ‘insolvency practitioner’ means a person or body who has one or more of the functions listed to in Article 2, point (5), of Regulation (EU) 2015/848 and who carries out one or more of the tasks listed in Article 2(1), point (12), of Directive (EU) 2019/1023;

Changed:Article 2 – paragraph 1 – point f: (f) ‘legal act’ means any intentional human behaviour, producing a legal effect;

Changed:Article 6 – paragraph 2 – subparagraph 1 – point b: (b) that creditor knew that the debtor was unable to pay its mature debts,debts or that a request for the opening of insolvency proceedings hadhas been submitted or that, in the absence of a formal request, a resolution to commence insolvency proceedings had been made.

Changed:Article 14 – paragraph 2: 2. Member States shall ensure that, upon request of the insolvency practitioner appointed in ongoing insolvency proceedings, including interim proceedings, the designated courts or administrative authorities have the power to access and search, directly and immediately, bank account information in other Member States available through the bank account registers interconnection system (BARIS) referred to in Article 16(6) of Directive (EU) 2024/1640, where necessary for the purposes of identifying and tracing assets belonging to the insolvency estate of the debtor in that those proceedings, including those assets subject to avoidance actions.

Changed:Article 17 – paragraph 1: 1. Member States shall ensure that insolvency practitioners, when identifying and tracing assets relevant for the insolvency proceedings for which they are appointed, have timely access to the information on the beneficial owners of legal entities and of legal arrangements held in central beneficial ownership registers, and that such access is provided without alerting the entity, the legal arrangement or the beneficial owner concerned.

Changed:Article 18 – paragraph 1: 1. Member States shall ensure that insolvency practitioners, when identifying and tracing assets relevant for the insolvency proceedings for which they are appointed, regardless of the Member State where they have been appointed, have direct and expeditious access to the national registers and databases listed in the Annex located in their territory, where available.

Changed:Article 23 – paragraph 1: Member States shall ensure that during the preparation phase, where the debtor is in a situation oflikely likelihoodto ofbecome insolvencyinsolvent or is insolvent in accordance with national law, the debtor can benefit from a stay of individual enforcement actions in accordance with Articles 6 and 7 of Directive (EU) 2019/1023, where it facilitatesis theessential seamlessfor andthe effectivesuccessful roll-out of the pre-pack proceedings. The monitor and the correspondentcorresponding creditor shall be heard by the court prior to the decision on the stay of individual enforcement actions.