Articles 38(13), 40(11) and 42(12) of Directive 2014/59/EU (BRRD) state that shareholders or creditors whose assets, rights and liabilities are not transferred, shall have no rights over the assets, rights and liabilities that are transferred. What is meant by that and how would this affect a creditors right in rem against an institution?
How would the BRRD apply if a creditor has both a claim against the institution and a right in rem, vested in an asset of the institution. What, if the asset is transferred and the claim is not transferred. Is the consequence of Articles 38(13), 40(11) and 42(12) that the creditor loses his right in rem?
If the asset is transferred, but the claim/liability is not, it would still comply with Article 78 of Directive 2014/59/EU (BRRD) if the right in rem (e.g. lien, mortgage) does not serve to secure the claim/liability. Otherwise, either both are transferred or none may be transferred.
If the right in rem is no collateral for the claim/liability, the situation stated in the example would comply with the Directive and the question as to the legal consequences of Articles 38(13), 40(11) and 42(12) of the BRRD becomes relevant.
In this respect, these provisions always refer to the specific assets, rights or liabilities in question.
Thus a creditor would not lose his right in rem (e.g. a lien or mortgage) if it was transferred to the purchaser/bridge institution/asset management vehicle along with the asset.
This question goes beyond matters of consistent and effective application of the regulatory framework. A Directorate General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) prepared the answer, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. This is an unofficial opinion of that Directorate General, which the European Banking Authority publishes on its behalf. The answers are not binding on the European Commission as an institution. You should be aware that the European Commission could adopt a position different from the one expressed in such Q&As, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.
Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Directive 2014/59/EU (BRRD) and continues to be relevant.