Pre-pack proceedings should ensure that the best bid received during the preparation phase is either submitted to the court or competent authority for authorisation or to the creditors for approval. The monitor should assess and state whether piecemeal liquidation would recover more value for creditors than the market price obtained through the sale of the business, or part thereof, as a going concern. The going-concern value of a business might reasonably be expected to be higher than its piecemeal liquidation value because it is based on the assumption that the business will continue its operations with the minimum of disruption, maintain the confidence of financial creditors, shareholders and clients, and continue to generate revenue. No undue burden is to be placed on the monitor or on the sale process and, in particular, a full-fledged valuation should not be required in the preparatory phase of the process, unless the prospective buyer is a party closely related to the debtor. It should be possible for Member States to require the monitor to take into account elements other than price, including the public interest or the viability of the business. However, a requirement to impose increased scrutiny should apply where the bid that is considered the best bid is made by a party who is closely related to the debtor. It should be possible for Member States to require the monitor to justify its conclusion that the bid identified as the best bid does not put the creditors in a worse situation than that they would be in as a result of an alternative mechanism for addressing the debtor’s insolvency. The monitor should document the preparation of the sale process in order to provide an appropriate basis for the authorisation or approval of the best bid.
Text as published in the Official Journal, reproduced verbatim (including any typographical quirks of the source). For the authentic version, see EUR-Lex.
