Insolvency legislation should treat businesses as a social asset, says EESC | European Economic and Social Committee

Insolvency legislation should treat businesses as a social asset, says EESC | European Economic and Social Committee

On 30 March 2017, the European Economic and Social Committee (EESC) adopted an opinion on the European Commission's proposed directive on business insolvency, which is intended to harmonise preventive restructuring procedures across Europe. While fully supporting the Commission's shift from liquidation to early restructuring in dealing with business insolvency, the EESC proposes a set of measures to help prevent its social damages. In particular, the EESCs suggests introducing a "social warning" mechanism to alert all stakeholders as soon as problems arise, creating specific funds to guarantee the payment of salaries, and making access to a second chance for failing entrepreneurs conditional to full disclosure of financial information.(...)