sou 1999 1 - Regeringen

44 Summary SOU 1999:1
As a consequence of the above, the Committee presents certain proposals
designed to strengthen the remaining business mortgage so that the actual
change does not result in a halving of the borrowing value. The idea is that,
within the framework of 50%, the business mortgage will be as reliable a
form of security as possible.
In this context, the most important proposal is to reconstitute the business
mortgage into a general right of priority in all of the property of the business.
It will thereby not matter whether the accounts receivable of the business
are converted into liquid funds immediately prior to a bankruptcy.
Upon a recalculation of the dividend in all bankruptcies as they appear today,
this would only result in a marginal improvement (2-3%) while the
reliability should be significantly more valuable in conjunction with the extension
of credit. In addition, the abolition of the right of priority for rent
claims is designed to strengthen the remaining business mortgage.
Today a business mortgage creditor can expect, on average, a dividend of
45%. As a result of proposed reform he may expect to receive 22,5% plus
increases related to the extended basis of the business mortgage, the abolishment
of priority for rent claims, and the improved dividends to unsecured
creditors, altogether approximately 30%. Furthermore, he needs not to
worry about a risk that significant stock in trade or receivalles in his specific
case will fall outside the security because they were converted to liquid
funds immediately prior to insolvency proceedings.
It is proposed that the new regulations regarding business mortgage enter
into force following a transition period of 1.5 years during which holders of
business mortgage will have the possibility of terminating the credit and,
where necessary, carrying out an bankruptcy according to the current rules.
cle to reorganisation and oppose the emphasis on the competition-distorting effects
of the wage guarantee. They do not wish the wage guarantee to be used in
business reorganisations outside bankruptcy and do not accept that wages from
the wage guarantee during the business reorganisation may be deducted if the
reorganisation is converted into an bankruptcy. They wish to retain the link between
the right of priority and wage guarantee. They believe that the proposals do
not provide sufficient levels of wage protection, either with regard to times, ceilings,
saved holidays, etc. In addition, they believe that the liability of the estate in
bankruptcy for wages when certain employees are used during the period following
notice of dismissal should result in the re-employment priority regulations in
the Employment Protection Act being applicable. They propose that wages earned
prior to the bankruptcy and two months’ wages following notice of dismissal
should be subject to the wage guarantee, even if the employee works for the estate
during the period following notice of dismissal and, in addition, these wage
claims should have priority over business mortgage. However, the restriction on
the business mortgage to 50% of the current basis is accepted.