The New Harmonized Protection of Creditors in Cross-Border Mergers

Abstract

This article scrutinizes the new harmonized regime of creditor protection in cross-border mergers under Art. 126 b of Directive 2019/2121. The risks that creditors face at a cross-border merger revealed the need for harmonization. The previous regime based on old Art. 121(2) of Directive 2017/1132 together with old Art. 121(1)(b) of Directive 2017/1132 referred to national law with regard to the protection of creditors in cross-border mergers, which resulted in legal diversity at EU level. The new harmonized rules are analyzed. More specifically, this article examines creditor protection through the disclosure of the solvency declaration and the common draft terms of the cross-border merger and creditor protection through the possibility of dissatisfied creditors to apply for adequate safeguards. The argument that other national law mechanisms of general company law or civil law are available in parallel with the special harmonized provisions on protection of creditors of Art. 126 b could be underpinned by the application by analogy of the findings of the CJEU in I.G.I. Srl. Various other aspects of creditor protection are examined, such as the notion of creditor and the rebuttable presumption of Art. 126b(3) of the Proposed Directive. Additionally, a few proposals to Member States for the implementation of the new provisions of creditor protection in cross-border mergers are discussed. Some future perspectives on the possibility of full harmonization in this area and a few concluding remarks are inferred.