How should the transfer back procedure be applied in the context of the sale of business tool?
As regard the sale of business tool, there is no reference to the particular cases or requirements for the use of transfer back as in Articles 40 (7) and 42(10) in relation to bridge bank tool and segregation tool, respectively. Moreover, in practical terms it might be very difficult to carry out the “send-back- procedure”. In particular if you have used the sale of shares tool and the purchaser has handed the price over the resolution authority in order to manage the payment to the shareholders and that after a distribution the actual shareholder receives the money, how could one justify the “sending-back” of the money?
It would seem that a misevaluation has to be “compensated” rather than wiping the transaction out. An additional question arises whether the “send-back” procedure is discretional for the authority.
In the context of the sale of business tool, Article 38(6) of Directive 2014/59/EU (BRRD) requires Member States to empower resolution authorities to transfer assets, rights and liabilities back to the institution under resolution, and shares/other instruments of ownership to their original owners, provided that the purchaser consents to the transferral back. The modalities of exercise of such powers are to be governed by the applicable national law. In this respect, while Articles 40(7) and 42(10) BRRD set minimum conditions for the exercise of analogous powers of transferral back when the bridge bank and the asset separation are the tools applied, Article 38(6) BRRD makes the transfer back conditional solely on the consent of the purchaser. The purchaser’s consent may be obtained a priori by including specific provisions in the purchase contract, if national law allows for it.
The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.