The EU Court of Justice finds that the Commission is obliged to consider the private investor test in State aid cases, even if it has not been raised by the Member State (Frucona Košice)

Article published on StateAidHub: http://stateaidhub.eu, republished in e-Competitions with the courtesy of the author. The original title of this article appears below the e-Competitions title. Authors are welcome to write an alternative article on this case/text, provided they have no relationships with a party or related third party. Article will need e-Competitions Board approval before publication.

Private Creditor Test* The Commission must apply the private creditor test even if a Member State does not request it or believes that it is not relevant. Introduction Private investors always have two options: to invest or not to invest. They choose the option that generates the largest amount of profit or revenue. Similarly, private creditors also have two options: call in the loan and force the debtor into bankruptcy or forgive part or all of the amount. They choose the option that results in the smallest amount of loss. The amount of loss depends on several factors such as whether the loan is secured against collateral, the revenue that can be realised from a forced sale of the assets of the debtor, the complexity and length of insolvency proceedings, the chances of the debtor

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Phedon Nicolaides, The EU Court of Justice finds that the Commission is obliged to consider the private investor test in State aid cases, even if it has not been raised by the Member State (Frucona Košice), 20 September 2017, e-Competitions Bulletin September 2017, Art. N° 89862

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