2.4.3. Transfer of Undertakings and Distributional Policies

In any event, the Court's case law suggests that under Community law redistribution

in insolvency is allowed not only for the purpose of value maximisation. In Abels,

interpreting Directive 7 7 / 1 8 7 on safeguarding the rights of employees in the event of

transfers of undertakings, "' the Court noted that,

[i]nsolvency law is characterised by special procedures intended to weigh the

various interests involved, in particular those of the various classes of creditors;

consequently in all the Member States there are specific rules which may derogate,

at least partially, from other provisions, of a general nature, including provisions

of social law.1-1

This was not merely a statement of fact regarding the positive law of the Member

States. According to the Court

[ t j h e specificity of insolvency law, encountered in all the legal systems of the

Member States, is confirmed in Community law...1 '

The central issue in Abels was whether Directive 77/1 87 applied where the transfer took

place in insolvency. The Court held that the Directive did not apply to transfers of

undertakings Taking place in the context of insolvency proceedings instituted with

a view to the liquidation of assets of the transferor'. However, Member States could

of their own volition extend the scope of the Directive to transfers in the course of such

proceedings. Moreover, the Directive did (and does) apply to transfers during

Supm c h a p t e r 3, para l . s . 3.