Establishing national insolvency registers from 26 June 2018

We look at the requirement for Member States to establish national insolvency registers under the Recast Regulation on Insolvency, Regulation (EU) 848/2015 by 26 June 2018.

What are the key dates?

Although the Recast Regulation on Insolvency, Regulation (EU) 848/2015 entered force on 26 June 2015 and the majority of the provisions were effective from 26 June 2017 onwards (to allow Member States to familiarise themselves with the new provisions), the establishment and interconnection of national registers was carved out as a two-step process:

  • 26 June 2018 (ie 36 months after the Recast Regulation on Insolvency came into force): deadline for Member States to establish and maintain national insolvency registers (see Articles 24(1), 92(2)(b) of Regulation (EU) 848/2015)
  • 26 June 2019 (ie 48 months after the Recast Regulation on Insolvency came into force): deadline for the European Commission to agree specifications to enable the interconnection of national registers (see Articles 25, 92(2)(c) of Regulation (EU) 848/2015)

What mandatory information will the new registers contain?

The following 'mandatory information' must as a minimum be made available (free of charge) in the national insolvency registers established by Member States from 26 June 2018 (see Article 24(2) of Regulation (EU) 848/2015) and covers main, secondary and territorial proceedings opened in that Member State:

  • the date of the opening of insolvency proceedings
  • the court and any case reference number
  • the type of proceedings in Annex A of Regulation (EU) 848/2015 (as updated by Regulation (EU) 2017/353, Annex 1) and sub-type of any insolvency proceedings opened (where applicable)
  • which article jurisdiction for opening proceedings is based upon (see Article 3(1) of Regulation (EU) 848/2015 (main proceedings), Article 3(2) (secondary proceedings) or Article 3(4) (territorial proceedings)
  • for companies—the company's name, registration number, registered office or if different, postal address
  • for individual debtors—their name, any registration number and postal address or where that is protected, their place and date of birth—as a compromise to deal with data protection concerns, where the individual does not exercise an independent business or professional activity, this information either:
    • need not be published in the registers provided that known foreign creditors are informed of the information, or
    • may be subject to supplementary search criteria (eg conditional on a request to the competent authority and/or conditional on verification of a legitimate interest in the information)
  • the name, postal address or email address of any insolvency practitioner (IP) appointed
  • any time limit for lodging claims or the criteria for calculating time limits (Recital 78 of Regulation (EU) 848/2015 suggests that hyperlinks could be added to link to the criteria for calculating those time limits appearing on the European e-Justice Portal)
  • the date of closing main insolvency proceedings, if any
  • the court before which decisions to open proceedings can be challenged and the applicable time limits (or the criteria for calculating the time limits)

The information must be published as soon as possible after the opening of proceedings (see Art 24(1) of Regulation (EU) 848/2015). Additional information may also be included in the national registers (eg directors' disqualifications). Although the mandatory information must be available free of charge, Member States may charge for any additional information or documents.

The e-Justice Portal provides links to various national insolvency registers across the Member States (where such registers are currently available).

Interconnection of national registers and the E-Justice Portal

The European Commission must agree the technical specifications for the interconnection of national registers by 26 June 2019. Creating a searchable database of insolvency proceedings across all Member States will be a big step forward. In theory, this should improve the ability for parties in any Member State to check the insolvency status of a company / individual undergoing an insolvency process in another Member State. It will help business leaders and entrepreneurs carry out the same checks as they would when investing in their home country and will also support creditors looking to follow insolvency cases taking place in another Member State, with information being available at one web address: the European e-Justice Portal. The aim is to improve the provision of information to relevant creditors and courts, and to prevent the opening of parallel insolvency proceedings

Art 25 of Regulation (EU) 848/2015 provides that the system shall provide a search service in all the official languages of the EU in order to make available the mandatory information and any other documents or in-formation included in the insolvency registers which the Member States choose to make available through the European e-Justice Portal. The standard form to be used for the electronic submission of individual requests for information via the European e-Justice Portal appears at annex IV of Regulation (EU) 2017/1105 (see form: Request for Access to Information).

On 7 July 2014, the European Commission launched a pilot project linking up databases from various Member States including: Germany, Estonia, Italy, Latvia, Netherlands, Austria, Romania and Slovenia, with more countries expected to join at a later stage.

By way of background, the e-Justice Portal was launched in 2010, with the aim of making cross-border justice more accessible to citizens, businesses, and legal practitioners and covers many areas other than insolvency.

What are the practical implications for practitioners dealing with cross-border cases?

In England, Companies House searches already provide a well-established way to check for the commencement of various formal insolvency processes of companies, but the additional mandatory information (listed above) which all Member States must provide online from 26 June 2018 will be a welcome addition for practitioners. The new national registries must include certain core information about the proceedings, including practical details to inform creditors and enable them to file claims.

The key benefits of having interconnected insolvency registers available through the European e-Justice Portal (after 26 June 2019) will include:

  • quicker, real-time access to insolvency information crucial for business decisions through a single point of access
  • key insolvency information available free of charge, in the languages of the EU
  • clear explanations on the insolvency terminology and systems of the participating Member States, helping users to better understand the applicable insolvency process

In practice, this will be helpful for various parties, including:

  • insolvency practitioners: to ascertain whether main or secondary proceedings have already been commenced in another Member State (and so whether main or secondary proceedings can be commenced in respect of that company) and will also facilitate the new form of group insolvency proceedings
  • creditors: to ascertain whether main or secondary proceedings have been commenced in any Member State and so ascertain the likelihood of any recoveries; if so, to enable them to file claims. This should help creditors to file claims in other Member States where they may not be so familiar with the applicable formalities and time limits for filing claims
  • distressed debt investors: to give greater visibility on the insolvency status of companies or individuals across all Member States

Will Brexit have any impact on the new registers?

The Draft Withdrawal Agreement (March 2018), art 63(4)(c)) specifically refers to the Recast Regulation on Insolvency and provides that it will continue to be applicable to all insolvency proceedings main insolvency proceedings that were opened (in the UK and all Member States) before the end of the transition period (ie 31 December 2020). So it seems likely that on the current Brexit timetable, the UK will still be subject to the Recast Regulation on Insolvency by 26 June 2019 (the deadline by which the European Commission is required to establish specifications for a decentralised system for the interconnection of national registers).

Even after Brexit, it seems likely that anyone will still be able to search the European e-Justice Portal, even though the UK would by then be a non-Member State. However, on Brexit, the automatic recognition of insolvency proceedings commenced in England in other Members States (currently main proceedings are automatically recognised under the Recast Regulation on Insolvency: Recast Regulation—effect of cross-border recognition under the regulation) cannot be guaranteed and will depend on what post-Brexit provisions are agreed with the European Commission.

This analysis was first published on LexisPSL Restructuring and Insolvency.

Further Reading

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Recast Regulation—main, secondary and territorial proceedings

Recast Regulation—establishing the centre of main interests (COMI) for corporates

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