24.11.2023

Supreme Court: "Pre-pack not allowed again until statutory regulation" (annotation), JAR 2023/16

A company in distress can benefit from a quietly prepared restart: the pre-pack. In 2014, for example, this was the case for shrimp processor Heiploeg, which made a fresh start using this method. After years of proceedings initiated by FNV, in which preliminary questions were even submitted to the Court of Justice of the European Union, the Supreme Court has now rendered its final judgment in this case. The bottom line is that the method may in principle be permissible, also from an employment law point of view, but that a legal regulation must first be introduced. And there isn't one (yet). Job van der Pijl wrote a commentary on the judgment, which we would like to share with you.

After Heiploeg (old) received a fine of over 27 million euros from the European Commission in 2013, it prepared a scenario in which it would file for bankruptcy and then restart under the identity of Heiploeg (new). After coordination with the supervisory judge, the bankruptcy of Heiploeg (old) was declared on January 27, 2014 and the trustee announced the restart of Heiploeg (new) on January 28, 2014. The question is whether this restart falls under the regulation on transfer of undertaking and all employees consequently transfer to Heiploeg (new) while retaining their rights and obligations. The Supreme Court put preliminary questions to the ECJ on this issue ("JAR" 2020/163). The ECJ ruled "that the Transfer of Undertaking Directive does not apply when the bankruptcy or similar proceedings in which the transferor is involved are under the supervision of a competent public authority, and when the transfer of (part of) an undertaking, prior to the declaration of bankruptcy, has been prepared in the context of a pre-pack procedure by an intended receiver, who is under the supervision of a proposed receiver and the agreement concerning this transfer was concluded and executed after the bankruptcy declaration with a view to liquidating the assets of the transferor, provided that such a pre-pack procedure is regulated by statutory or regulatory provisions'. The Supreme Court is now giving final judgment.

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