Employees as stakeholders in restructuring and insolvency: acquired rights and business transfers

The aim of this Chapter is to discuss a key regulatory mechanism that protects employees and employment in the context of restructuring procedures. As the nature of restructuring, preventive orotherwise, will often lead to asset sales, sometimes taking the form of business or going concern sales,11 a key practical consideration must be the fate of associated employees who are covered by the protections of the ARD and the impact of such protections on the potential success of a restructuring plan. This Chapter will focus on the treatment of employees in the context of business sales in Europe with an emphasis on the UK as a key restructuring destination that has had to deal with the ARD in great detail in its domestic courts. Although the cases generally deal with restructuring under the UK’s Administration procedure or the pre-pack, the reasoning employed in determining the application of the ARD will be relevant to whether the application of the Directive in new preventive restructuring procedures as the PRD throws this determination into the realm of applicable national law.12 This will then be contrasted with the approach in the Netherlands to the same issue, and the impact the Court of Justice of the European Union’s13findings have had on the use of the Dutch and Belgian pre-pack. Finally, there will be some analysis as to what this approach may mean for incoming preventive restructuring procedures implemented subsequent to the Preventive Restructuring Directive.