The Reconstructor's Competencies Roles and Taking Over Management During Reconstruction

Martin Zoega Bangsholt & Julian Steffen Evers

Student thesis: Master thesis

Abstract

The Danish way of dealing with insolvency in form of a reconstruction of companies, went through a major transformation with its new legislation in 2011. The new legislation replaced a supervisory board, with a reconstructor, who is now given a legal competence to veto against any general meeting resolutions. This authorization may be EU-controversial among other things, for the reason, that according to EU law, it is the general meeting, who can decide on capital increases. The main purpose of this thesis will therefore be, to analyze this issue and find out if the Danish bankruptcy law is in compliance with applicable EU legislation, and what factors that can influence the result. This project will therefore start by introducing the overall purpose of a reconstruction process, which is to carry on viable companies for the benefit of the society, followed up by a presentation of the applicable Danish law and its underlying elements, and the respective duties of the reconstructor. The analysis shows that the first condition that needs to be addressed in order to even apply the Danish rules, is that the reconstructor must have taken over the management seat. There can be several reasons for a shift in management, but the main reason, is that creditors of companies do not rely on the actual management to act in accordance with the interest of them, which is exemplified by a Danish real life example. It is found, that the applicable EU-Law is based on directive 77/91/EØF, which is implied in the Danish company act. Then it is analyzed if the Danish regulation is within the range of EU-law, otherwise there can be no EU controversy. Based upon interpretation of the directive trough in-depth text and judgment analysis and in the light of earlier chapters, it is found that EU-law is partly applicable, but only in case of company remediation where the legal person continues in its present form. It is found that even in cases of remediation, there is no direct link in the relevant interpretation that can support the fact that Danish law is in violation of EU law. These statements are based on the interpretations of the European Court of justice by various judgements. Finally it has been analyzed, how a reconstructor should respond, even in case that our analysis should be wrong, in case that Danish law contradict to EU-law. It has been found that a reconstructor should only apply local Danish Law, and should thereby not be limited by any potential EU limitations. This is important for creditors, that they can rely on the chosen reconstructor to serve their interest in the best manner, which should be seen in the light of the perspective in this project.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2018
Number of pages167
SupervisorsPatrik Lindskoug