It is generally assumed that a higher value can be recovered in liquidation by selling a business, or part thereof, as a going concern rather than by piecemeal liquidation. In order to promote the sale of a business as a going concern, national insolvency laws should provide for proceedings under which a debtor in financial distress, with the help, or under the supervision, of a monitor, can seek interested acquirers and prepare the pre-packaged sale of the business as a going concern (pre-pack proceedings) before the formal opening of insolvency proceedings. The assets of the business subject to the pre-pack proceedings can then be quickly realised shortly after the formal opening of the insolvency proceedings. This Directive should lay down standards for pre-pack proceedings, while allowing Members States to adapt those standards to their existing national insolvency law. In order to ensure that the sale process is fair, the monitor should be independent from the debtor and any party closely related to the debtor. Member States should be able to provide for additional requirements regarding the monitor’s independence from equity holders or creditors. The pre-pack proceedings should consist of two phases, namely a preparation phase and a liquidation phase.
Text as published in the Official Journal, reproduced verbatim (including any typographical quirks of the source). For the authentic version, see EUR-Lex.
