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Rescue of Business in Insolvency Law Instrument Approved

The ELI is proud to announce that the output of its flagship ‘Rescue of Business in Insolvency Law’ Project was voted upon by the ELI Council and ELI General Assembly on 6 September 2017 and approved by an overwhelming majority.

The ELI wishes to record its gratitude to the Project’s Reporters, Professors Bob Wessels and Stephan Madaus, for their tremendous work and congratulates them on completing this formidable task in such a timely manner. Acknowledgment is also due to Gert-Jan Boom for his supporting role.

About the Project

Since the global financial crisis, insolvency and restructuring law have been at the forefront of law reform initiatives in Europe and elsewhere. The specific topic of business rescue ranks top on the insolvency law related agenda of both the EU and national legislators faced by a rapid growth of insolvencies, which clearly highlighted the importance of efficient mechanisms for dealing with financially distressed, but viable business. For the ELI, this fuelled the momentum to launch an in-depth Project on furthering the rescue of such businesses across Europe.

The aim of the Project was to design (elements of) a legal framework that will enable the further development of coherent and functional rules for business rescue in Europe. This includes certain statutory procedures that could better enable parties to negotiate solutions where a business becomes financially distressed. Such a framework also includes rules to determine in which procedures and under which conditions an enforceable solution can be imposed upon creditors and other stakeholders despite their lack of consent. The Project had a broad scope, and extended to consider frameworks that can be used by (non-financial) businesses out of court, and in a pre-insolvency context. In the words of Prof Wessels, ‘the ELI Business Rescue Report aims to invigorate current thinking on corporate business rescue. As Europe stands at the doorstep of approximating existing insolvency and restructuring laws, this Report puts forward recommendations to pursue a coherent system for the benefit of all involved stakeholders.’

The ELI Instrument

The approved Instrument can be found here. A short report and explanation on the Project’s background and aims, as well as an overview of the results can also be found here.

Dissemination

Further, the Instrument will be presented at an evening reception on the occasion of the 52nd Session of the UNCITRAL Working Group V. This will take place at Palais Trautson in Vienna (Austria) on 20 December 2017 (more details will be provided in due course).