Reorganisation and winding-up of credit institutions

KEY POINTS

The directive:

• applies the principle of home country control. This means that the law of the EU country where the failed credit institution has its registered office applies to the entire bankruptcy proceedings;
• requires all relevant parties, including known creditors to be informed of the bankruptcy proceedings and re-organisation measures. This includes publication in the Official Journal of the European Union and at least 2 national newspapers in each host country (i.e. those in which the bank has its headquarters and its branches);
• provides that, as regards the winding-up proceedings, the applicable law is that of the home country. It should in particular cover such matters as:
  • the respective powers of credit institutions and liquidators,
  • the effects of the bankruptcy proceedings on any lawsuits brought by individual creditors, and
  • the allocation of costs and expenses.
• clarifies the impact of the bankruptcy proceedings and applicable law in relation to certain contracts and other legal rights that may be affected by the proceedings such as employment contracts and property rights;
• requires all persons required to receive or divulge information in connection with the bankruptcy proceedings to guarantee professional secrecy.