The preparation phase should be limited in time. Member States should provide for a maximum duration that can be shorter than the length of the stay of individual enforcement actions provided for in Directive (EU) 2019/1023. Where, in the course of the preparation phase, it becomes evident that the objectives of the pre-pack proceedings cannot be achieved, Member States should be able to provide that the pre-pack proceedings can be terminated. Such situations can occur where the debtor fails to cooperate with the monitor or to act with due diligence during the preparation phase. Another such situation is where there is no reasonable prospect of selling the business as a going concern, for example where the books and records of the debtor are incomplete or so deficient that it is impossible to ascertain its business and financial situation. Furthermore, in cases where national law stipulates that the sale process in the preparation phase be competitive, transparent and fair and meet market standard, acts of the debtor that do not comply with those requirements can be viewed as a failure to act with due diligence. Nevertheless, it should be possible for Member States to provide that, even if the debtor fails to cooperate with the monitor or to act with due diligence, where the continuation of the preparatory phase is in the general interest of the creditors, it is possible for the court or competent authority to limit the debtor’s rights to administer its business in accordance with applicable insolvency law, with a view to concluding the pre-pack proceedings.
Text as published in the Official Journal, reproduced verbatim (including any typographical quirks of the source). For the authentic version, see EUR-Lex.
