Case T-11/07

Frucona Košice a.s.

v

European Commission

(State aid – Partial remission of a tax debt in the context of an arrangement – Decision declaring the aid to be incompatible with the common market and ordering its recovery – Test of a private creditor in a market economy)

Summary of the Judgment

1. State aid – Commission decision – Judicial review – Limits

(Arts 88 EC and 230 EC)

2. Procedure – Application initiating proceedings – Formal requirements

(Statute of the Court of Justice, Arts 21 and 53, first para.; Rules of Procedure of the General Court, Art. 44(1)(c))

3. State aid – Provisions of the Treaty – Scope ratione temporis – Accession of a new Member State to the European Union

(Arts 87 EC and 88 EC; Act of Accession 2003, Annex IV, Section 3)

4. State aid – Examination by the Commission – Private creditor test – Complex economic assessment – Judicial review – Limits

(Arts 87(1) EC and 88(2) EC)

5. State aid – Definition – Remission of debts granted by public bodies to a firm in difficulty

(Art. 87(1) EC)

6. State aid – Examination by the Commission – Administrative procedure – Obligation on the Commission to put the parties concerned on notice to submit their observations – Status of the aid recipient

(Art. 88(2) EC)

7. State aid – Prohibition – Exceptions – Discretion of the Commission – Possibility of adopting guidelines

(Art. 87(3)(c) EC; Commission Notice 1999/C 288/02)

1. In an action for annulment the legality of the measure concerned must be assessed in the light of the matters of fact and of law existing at the time when that measure was adopted. The legality of a decision concerning State aid is to be assessed in the light of the information available to the Commission when the decision was adopted. An applicant cannot therefore rely, before the Court, on matters of fact which were not put forward in the course of the pre‑litigation procedure laid down in Article 88 EC. Similarly, it cannot be complained that the Commission failed to take into account matters of fact or law which could have been submitted to it during the administrative procedure but which were not, as the Commission is under no obligation to consider, of its own motion and on the basis of prediction, what information might have been submitted to it.

(see paras 48-51)

2. Under the first paragraph of Article 21 of the Statute of the Court of Justice, applicable to the procedure before the General Court by virtue of the first paragraph of Article 53 thereof, and Article 44(1)(c) of the Rules of Procedure of the General Court, each application is required to state the subject-matter of the dispute and a summary of the pleas in law on which the application is based. It is necessary, for an action to be admissible, that the basic matters of law and fact relied on be indicated, at least in summary form, coherently and intelligibly in the application itself.

(see para. 59)

3. In order to determine whether the Commission has the competence to review an aid measure in relation to which some of the relevant events took place before the accession of the Member State concerned to the European Union, the relevant criterion to be applied is the legally binding act by which the competent national authority undertakes to grant aid.

As regards the partial remission by a Member State authority of the tax debt of an undertaking in difficulty in the context of an arrangement, a distinction must be drawn between a decision to refrain from initiating a bankruptcy procedure or a tax execution procedure and a decision to approve a proposed arrangement. Only the latter decision implies that the tax authority has waived its claims over the undertaking. While a decision of a creditor not to initiate a bankruptcy procedure or a tax execution procedure merely delays a possible forced recovery of the claim, a decision of that creditor to approve a proposed arrangement means, subject to confirmation of that arrangement by the competent court, that that creditor definitively waives all or part of that claim. Consequently, in order to ascertain whether the Commission has the competence to examine the aid measure in question, it is necessary only to determine at what point in time the tax authority adopted its decision to approve the proposed arrangement.

(see paras 68-72)

4. In so far as the Commission’s application of the test of a private creditor in a market economy involves complex economic appraisals, like the application of the test of a private investor in a market economy, when reviewing it the Court must confine itself to verifying whether the Commission complied with the relevant rules governing procedure and the statement of reasons, whether the facts have been accurately stated and whether there has been any manifest error of assessment of those facts or a misuse of powers. However, whilst the Commission has a margin of discretion with regard to economic matters, that does not mean that the Courts of the European Union must refrain from reviewing the Commission’s interpretation of information of an economic nature. Not only must the Courts of the European Union establish whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it. However, when conducting such a review, the Courts of the European Union must not substitute their own economic assessment for that of the Commission.

(see paras 108-110)

5. A public body which has granted a debt remission should be compared to a private creditor who is seeking to obtain payment of sums owed to it by a debtor in financial difficulties. The status of creditor should be distinguished from that of a private investor in a market economy pursuing a structural policy – whether general or sectoral – guided by the longer-term prospects of profitability of the capital invested.

When a firm faced with a substantial deterioration of its financial situation proposes an agreement or series of agreements for debt arrangement to its creditors with a view to remedying the situation and avoiding liquidation, each creditor must make a decision having regard to the amount offered to it under the proposed agreement, on the one hand, and the amount it expects to be able to recover following possible liquidation of the firm, on the other. Its choice is influenced by a number of factors, such as the creditor’s status as a secured, preferential or ordinary creditor, the nature and extent of any security it may hold, its assessment of the chances of the firm being restored to viability, as well as the amount it would receive in the event of liquidation.

(see paras 114-115)

6. Under the procedure for reviewing State aid, the role of interested parties other than the Member State concerned is confined to providing the Commission with all the information needed to guide it with regard to its future action. Accordingly, they cannot themselves lay claim to an exchange of arguments with the Commission such as that initiated in regard to that Member State.

Moreover, of the interested parties, the recipient of the aid does not play a special role pursuant to any provision governing the procedure for the review of State aid. The procedure for the review of State aid is not a procedure initiated ‘against’ the recipient or recipients of aid by virtue of which it or they could rely on rights as extensive as the rights of the defence as such.

Furthermore, the legality of the contested decision is to be assessed in the light of the information available to the Commission when the decision was adopted and it is for the Member State concerned and, where appropriate, the recipient of the aid to adduce evidence to show that the aid is compatible with the common market and, if necessary, to plead specific circumstances relating to recovery of the aid already paid should the Commission require its repayment.

(see paras 178-180)

7. Pursuant to Article 87(3)(c) EC, ‘aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest’ may be considered to be compatible with the common market. Moreover, in accordance with settled case-law, Article 87(3) EC confers on the Commission a wide discretion to allow aid by way of derogation from the general prohibition laid down in Article 87(1) EC, since the determination in such a case of the question whether State aid is or is not compatible with the common market raises problems which presuppose the examination and appraisal of complex economic facts and conditions which may be liable to change rapidly. Since it is not for the Courts of the European Union to substitute their own assessment of the facts, particularly the economic circumstances, for that of the author of the decision, the Court must, in such a context, confine its review to determining whether the Commission complied with the rules governing procedure and the provision of the statement of reasons, whether the facts are accurately stated and whether there has been any manifest error of assessment or misuse of powers.

The Commission may adopt a policy as to how it will exercise its discretion in the form of measures such as guidelines, in so far as those measures contain rules indicating the approach which the institution is to take and do not depart from the rules of the Treaty. As regards State aid for rescuing and restructuring firms in difficulty, it is clear from paragraph 31 of the 1999 Guidelines that, in order to be declared compatible with Article 87(3)(c) EC, individual aid to undertakings in difficulty must be bound to a restructuring programme which has been endorsed by the Commission. Moreover, under paragraphs 32 to 40 of the 1999 Guidelines, the restructuring plan, the duration of which must be as short as possible, must inter alia restore the long‑term viability of the firm within a reasonable timescale and on the basis of realistic assumptions as to future operating conditions, whilst limiting the amount and intensity of the aid to the strict minimum. In addition, in accordance with paragraphs 43 and 45 of the 1999 Guidelines, the company concerned must fully implement the restructuring plan as accepted by the Commission. That implementation and the satisfactory progress of the plan must be monitored by the Commission, to which detailed annual reports must be submitted. In the absence of a credible restructuring plan, the Commission is justified in refusing to authorise the aid in question.

(see paras 225-229, 231)

JUDGMENT OF THE GENERAL COURT (Second Chamber)

7 December 2010 ( )

(State aid – Partial remission of a tax debt in the context of an arrangement – Decision declaring the aid to be incompatible with the common market and ordering its recovery – Test of a private creditor in a market economy)

In Case T‑11/07,

Frucona Košice a.s., established in Košice (Slovakia), represented by B. Hartnett, Barrister, and O.H. Geiss and A. Barger, lawyers,

applicant,

v

European Commission, represented by B. Martenczuk and K. Walkerová, acting as Agents,

defendant,

supported by

St. Nicolaus-trade a.s., established in Bratislava (Slovakia), represented by N. Smaho, lawyer,

intervener,

ACTION for annulment of Commission Decision 2007/254/EC of 7 June 2006 on State aid C 25/05 (ex NN 21/2005) implemented by the Slovak Republic for Frucona Košice a.s. (OJ 2007 L 112, p. 14),

THE GENERAL COURT (Second Chamber),

composed of I. Pelikánová, President, K. Jürimäe (Rapporteur) and S. Soldevila Fragoso, Judges,

Registrar: C. Kantza, Administrator,

having regard to the written procedure and further to the hearing on 14 October 2009,

gives the following

Judgment

Legal context

1. Community legislation

1 In 1999 the Commission of the European Communities adopted Community guidelines on State aid for rescuing and restructuring firms in difficulty (OJ 1999 C 288, p. 2; ‘the 1999 Guidelines’).

2 According to paragraph 31 of the 1999 Guidelines:

‘The grant of the aid is conditional on implementation of the restructuring plan which must be endorsed by the Commission in the case of all individual aid measures.’

3 With respect to small and medium‑sized enterprises (SMEs), paragraph 55, which appears under the heading ‘Aid for restructuring [SMEs]’ provides as follows:

‘Aid to firms in the small to medium-sized category … tends to affect trading conditions less than that granted to large firms. This also applies to aid to help restructuring, so that the conditions laid down in [paragraphs] 29 to 47 are applied less strictly: the grant of restructuring aid to SMEs will not usually be linked to compensatory measures (see [paragraphs] 35 to 39), unless this is otherwise stipulated in rules on State aid in a particular sector; and the requirements regarding the content of reports will be less stringent (see [paragraphs] 45, 46 and 47). On the other hand, the “one time, last time” principle ([see paragraphs] 48 to 51) applies in full to SMEs.’

2. National legislation

4 Zákon 328/1991 Zb. o konkurze a vyrovnaní (Act No 328/1991 on bankruptcy and creditor arrangement (‘the Law on bankruptcy and arrangement with creditors’)) lays down the applicable rules in Slovakia in relation to bankruptcy and arrangement procedures.

Background to the dispute

1. The applicant

5 The applicant, Frucona Košice a.s., is a company incorporated under Slovak law with its seat in Košice (Slovakia), a city which on 7 June 2006 was in an area eligible for regional aid under Article 87(3)(a) EC. In 1995, the year in which it was incorporated, the applicant acquired the assets and liabilities of a former State enterprise.

6 The applicant was originally active in the sector of the production of alcohol and spirits and also in the manufacturing sector of agricultural products such as canned fruit, vegetables and juices, and of carbonated and non-carbonated beverages. On 6 March 2004, its licence for the production and processing of alcohol and spirits was revoked on the ground that it had not paid the excise duty for which it was liable. Since then, it has no longer produced spirits but has distributed them, in accordance with an agreement concluded on 24 August 2004 with Old Herold, s.r.o. Under that agreement, the applicant leased to Old Herold its distilleries in Košice and Obišovce (Slovakia), distilleries in which Old Herold produced spirits under licence, which the applicant then purchased in order to sell to its customers under the Frucona brand.

2. National administrative and judicial procedures

7 Following the entry into force, on 1 January 2004, of zákon č. 609/2003 Z.z., ktorým sa mení a dopĺňa zákon Slovenskej národnej rady č. 511/1992 Zb. o správe daní a poplatkov a o zmenách v sústave územných finančných orgánov v znení neskorších predpisov a ktorým sa menia a dopľňajú niektoré ďalšie zákony (Law No 609/2003 amending and supplementing Act No 511/1992 of the National Assembly of the Slovak Republic on the administration of taxes and fees and changes to the system of local fiscal authorities, and amending and supplementing certain other laws), which provides inter alia that a taxable person is allowed to apply for tax payment deferral only once per year, the applicant was faced with financial difficulties which prevented it from paying the excise duty due in respect of January 2004 and payable on 25 February of that year. The applicant had previously benefited from several deferrals of payment of its tax debt, which had been granted to it after financial security had been provided to the Slovak tax authorities. The applicant was therefore in a position of indebtedness for the purposes of the Law on bankruptcy and arrangement with creditors.

8 Anticipating the financial difficulties resulting from the proposed amendment to and ultimately the amendment made to the legislation on tax deferral, the applicant, represented in particular by its general director, had met representatives of the Slovak Tax Directorate on 16 December 2003 and 23 January 2004. On 30 January 2004, the applicant’s general director also met the Slovak Minister for Finance. At those meetings the applicant set out, in particular, its proposal to settle its tax liabilities in the context of a possible arrangement procedure.

9 Meanwhile, the applicant had also contacted its local tax office, namely the Košice IV Office (‘the Tax Office’). By letter of 8 January 2004, the applicant informed the Tax Office that, as regards the excise duty, it would not be able to pay in February 2004 the outstanding sums payable and proposed either paying those sums in instalments spread out over a five‑year period or accepting a proposed arrangement under which payment would be limited to 35% of the sums due. By letter of 3 February 2004, the Tax Office rejected the first part of the alternative proposed by the applicant and, as regards the second part of that alternative, namely the proposed arrangement, replied as follows: ‘… in principle, the tax administrator does not object to an arrangement. However, it cannot agree to your proposal for an arrangement that represents the payment of 35% of the sum due. We understand that before a petition for an arrangement is filed, the terms and conditions of the arrangement must be discussed.’

10 On 8 March 2004, the applicant filed an application for the initiation of an arrangement procedure before the Krajský súd v Košiciach (Regional Court, Košice, Slovakia), in which it referred to its over-indebtedness and described, in accordance with the provisions of the Law on bankruptcy and arrangement with creditors, the various measures to ensure its financial recovery after the arrangement procedure. The total amount of the tax debt taken into account in its proposed arrangement was approximately [confidential] Slovak koruna (SKK) out of a total amount of debt of approximately SKK 644.6 million. Under its proposed arrangement the applicant proposed to all its unsecured creditors and to certain preferential creditors that it would pay each of them an amount equivalent to 35% of the total of the sums that it owed each one.

11 By decision of 29 April 2004, the Krajský súd v Košiciach held that the conditions laid down in Article 46 et seq. of the Law on bankruptcy and arrangement with creditors were met and therefore authorised the initiation of the arrangement procedure pursuant to Article 50(3) of that law. In the context of that procedure, it inter alia requested that the applicant’s creditors adduce proof of their respective claims. It also appointed an arrangement administrator and ordered that the applicant and its creditors attend an arrangement hearing set for 9 July 2004 (‘the arrangement hearing of 9 July 2004’). Lastly, the court reproduced the arrangement conditions which had been set out by the applicant in its proposed arrangement of 8 March 2004.

12 In order to enable the Tax Office to assess the respective advantages of arrangement, bankruptcy and tax execution under Slovak law, the applicant submitted to it a number of audit reports prior to the confirmation of the arrangement by the Krajský súd v Košiciach. On 26 April 2004, it sent a first audit report drawn up by its internal auditor, Ms K. (‘the K report’), in which the proceeds from the sale of the applicant’s assets under a bankruptcy procedure had been assessed at [confidential]. On 7 July 2004, the applicant sent a second audit report drawn up by an independent audit company, namely the company E (‘the E report’), in which it was stated, [confidential]. A draft version of the E report had been sent to the Tax Office in late June 2004.

13 On 21 June 2004, the Slovak tax authorities carried out an on-the-spot inspection in the applicant’s premises. During that inspection, it found that, as at 17 June 2004, the applicant had liquid assets in the amount of SKK [confidential].

14 By letter of 6 July 2004, the Director-General of the Slovak Tax Directorate asked the Tax Office not to accept the applicant’s proposed arrangement at the arrangement hearing of 9 July 2004 on the ground that it was unfavourable for the Slovak Republic, having regard to a letter from the Slovak Minister for Finance of 15 January 2004 attached as an Annex, in which the Minister asked the Director‑General to ensure that tax administrators did not agree to a reduction in a taxpayer’s tax debt.

15 During the arrangement hearing of 9 July 2004 the applicant’s creditors, including the Slovak tax authorities, accepted the applicant’s proposed arrangement.

16 By decision of 14 July 2004, the Krajský súd v Košiciach confirmed the arrangement. It first of all identified the applicant’s creditors who had adduced proof of their claims in the context of the arrangement procedure. It stated in particular that the Slovak tax authorities had a receivable claim of approximately SKK [confidential] in respect of which the arrangement provided that 35% would be repaid, that is an amount to be paid of approximately SKK 224.3 million. Next, it found that, during the arrangement hearing of 9 July 2004, the applicant’s creditors, including the Tax Office, as a preferential creditor, and consequently by a separate vote, all voted, in accordance with Article 58(4) and (5) and Article 58b(1)(a) and (2) of the Law on bankruptcy and arrangement with creditors, in favour of the applicant’s proposed arrangement. That court also recalled the conditions which had to be satisfied in order that, under Article 60(1) of that law, the arrangement in question could be subsequently confirmed and then held that the conditions were fulfilled in the present case.

17 On 14 July 2004, the Slovak Tax Directorate suspended and replaced the director of the Tax Office.

18 By letter of 20 October 2004, the Tax Office stated to the applicant that the arrangement conditions that it had approved at the arrangement hearing of 9 July 2004, according to which a part of the tax debt did not have to be repaid, constituted indirect State aid, which is subject to the approval of the European Commission. It also requested that the applicant submit by 19 November 2004 an investment plan relating to the sums which did not have to be repaid, pursuant to the decision of the Krajský súd v Košiciach of 29 April 2004.

19 By judgment of 25 October 2004, the Najvyšší súd Slovenskej republiky (Supreme Court of the Slovak Republic) dismissed the appeal lodged by the Tax Office in August 2004 against the decision of the Krajský súd v Košiciach of 14 July 2004 as inadmissible and declared that decision to be valid and enforceable as of 23 July 2004.

20 By letter of 9 November 2004, the applicant replied to the Tax Office’s letter of 20 October 2004, stating that it had filed an ‘application [for an arrangement]’ and not an ‘application for … State aid’. In that letter it stated that it did not agree that a consent given by a Tax Office administrator should be classified as State aid. The applicant also stated that it regarded the request for the investment plan as ‘unfounded’.

21 On 14 December 2004, the director of the Tax Office, who was suspended on 14 July 2004, was indicted on fraud and embezzlement charges.

22 On 17 December 2004, the applicant, in accordance with the arrangement, in particular paid to the Tax Office an amount of SKK 224.3 million, which corresponds to 35% of its total debt. By decision of 30 December 2004, the Krajský súd v Košiciach found that the arrangement was valid as of 23 July 2004 and declared the arrangement procedure to be terminated.

23 In order to confirm the advantages of an arrangement procedure over a bankruptcy procedure, the applicant also obtained a third audit report dated 27 January 2005 from Ms H., [confidential] (‘the H report’), in which she stated that, [confidential].

24 By judgment of 6 March 2006, the Špeciálny súd v Pezinku (Special Court, Pezinok, Slovakia) acquitted the director of the Tax Office, who was suspended on 14 July 2004, of all charges.

25 Following an extraordinary appeal against the decision of the Krajský súd v Košiciach of 14 July 2004, the Najvyšší súd Slovenskej republiky, by decision of 27 April 2006, partially overturned the decision of the Krajský súd v Košiciach of 14 July 2004 on the ground that road tax arrears in the amount of SKK 424 490 had wrongly been included in the arrangement. The Najvyšší súd Slovenskej republiky dismissed the appeal as to the remainder. By decision of 18 August 2006, the Krajský súd v Košiciach implemented the decision of the Najvyšší súd Slovenskej republiky of 27 April 2006 and stipulated the corrected amount due to the Tax Office as being SKK 640.4 million (35% of which amounts to SKK 224.1 million).

3. Administrative procedure before the Commission

26 By letter of 15 October 2004, a complaint was made to the Commission concerning alleged unlawful aid in favour of the applicant.

27 By letter of 6 December 2004, the Commission requested the Slovak Republic to inform it about the measure in question, namely the partial remission of the applicant’s tax debt in the context of an arrangement.

28 By letter of 4 January 2005, the Slovak Republic informed the Commission about possible unlawful aid granted to the applicant and asked it to approve the aid as rescue aid to a company in difficulties.

29 After receiving additional information, the Commission, by letter of 5 July 2005, notified the Slovak Republic of its decision to initiate the formal investigation procedure provided for in Article 88(2) EC as regards the measure in question (‘the decision to initiate the formal investigation procedure’). That decision was published in the Official Journal of the European Union of 22 September 2005 (OJ 2005 C 233, p. 47) and interested parties were at the same time invited to submit their comments on the measure in question.

30 By letter of 10 October 2005, the Slovak Republic sent its comments on the measure in question to the Commission. The applicant likewise sent its comments on the measure in question to the Commission, by letter of 24 October 2005, and those comments were forwarded to the Slovak Republic to allow it to respond, which it did by letter of 16 December 2005.

31 On 28 March 2006 there was a meeting between the Commission and the applicant. At that meeting the applicant stated inter alia that it had chosen the arrangement procedure instead of the bankruptcy procedure, that Old Herold produced using the applicant’s assets and brand, that their cooperation, which had started in July 2004, was based on an exclusive distribution agreement of products of Old Herold, that the pledge amounted to SKK 194 million, that the E report was intended to show the Tax Office that the arrangement procedure was preferable to a bankruptcy procedure, that it was not able to explain why the company E had used figures of 31 March 2004, that the supplier loan had been given to it by Old Herold during the second half of 2004 and that the standard maturity for the applicant’s liabilities was between 14 and 60 days.

32 By letter of 4 April 2006, the applicant forwarded the Commission a copy of the judgment of 6 March 2006 delivered by the Špeciálny súd v Pezinku.

33 By letter of 5 May 2006, the Slovak Republic sent additional information to the Commission.

34 On 7 June 2006, the Commission adopted Decision 2007/254/EC on State aid C 25/2005 (ex NN 21/05) implemented by the Slovak Republic for the applicant (OJ 2007 L 112, p. 14) (‘the contested decision’).

35 The operative part of the contested decision provides:

‘Article 1

The State aid which the Slovak Republic has implemented for [the applicant], amounting to SKK 416 515 990, is incompatible with the common market.

Article 2

1. The Slovak Republic shall take all necessary measures to recover from the [applicant] the unlawfully granted aid referred to in Article 1.

2. Recovery shall be effected without delay and in accordance with the procedures of national law provided that they allow the immediate and effective execution of this decision.

3. The sum to be recovered shall bear interest throughout the period running from the date on which it was put at the disposal of [the applicant] until its actual recovery.

4. The interest shall be calculated in accordance with the provisions laid down in Chapter V of Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article [88 EC]. The interest rate shall be applied on a compound basis throughout the entire period referred to in paragraph 3.

Article 3

The Slovak Republic shall inform the Commission, within two months of notification of this Decision, of the measures taken to comply with it. It shall provide this information using the questionnaire attached in Annex I to this Decision.

Article 4

This Decision is addressed to the Slovak Republic.’

36 The applicant received a copy of the contested decision from the Mission of the Slovak Republic in Brussels (Belgium) on 2 November 2006.

Procedure and forms of order sought

37 By application lodged at the Registry of the Court on 12 January 2007, the applicant brought the present action.

38 By document lodged at the Registry of the Court on 8 June 2007, the undertaking St. Nicolaus trade a.s. sought leave to intervene in these proceedings in support of the Commission.

39 By order of 11 October 2007, the President of the Second Chamber of the Court granted that leave to intervene and decided that, given that the application to intervene was made after the expiry of the period of six weeks prescribed in Article 115(1) of the Rules of Procedure of the Court, the intervener would have the rights provided for in Article 116(6) of those rules.

40 Upon hearing the Report of the Judge-Rapporteur, the Court (Second Chamber) decided to open the oral procedure and, by way of measures of organisation of procedure provided for in Article 64 of the Rules of Procedure, the applicant and the Commission were requested to lodge certain documents and to answer a number of questions in writing. The parties answered those measures of organisation within the prescribed time‑limits.

41 The parties presented oral argument and replied to questions put by the Court at the hearing on 14 October 2009.

42 The applicant claims that the Court should:

– annul the contested decision or, at least, annul totally or in part Article 1 thereof;

– order the Commission to pay the costs.

43 The Commission, supported by the intervener, contends that the Court should:

– dismiss the action;

– order the applicant to pay the costs.

44 At the hearing, the intervener essentially supported the form of order sought by the Commission, to the effect that the Court should dismiss the action and order the applicant to pay the costs.

Substance

45 In support of its claim for annulment, the applicant relies on 10 pleas in law alleging (i) a manifest error in the assessment of the amount of the aid measure in question, (ii) infringement of an essential procedural requirement and of Article 33 EC, (iii) essentially, that the Commission lacked the competence to adopt the contested decision, (iv) that the Commission erred in law and in fact when it found the bankruptcy procedure to be more advantageous than the arrangement procedure, (v) that the Commission erred in law and in fact by finding the tax execution procedure to be more advantageous than the arrangement procedure, (vi) that the Commission erred in law and in fact by failing to discharge the burden of proof incumbent on it and infringed the applicable legal rules regarding the application of the test of a private creditor in a market economy, (vii) that the Commission erred in law and fact by failing to correctly assess or have regard to the evidence at its disposal, (viii) that the Commission erred in law and in fact by taking into account irrelevant evidence, (ix) infringement of Article 253 EC in that the Commission provided an inadequate statement of reasons for the contested decision and (x) that the Commission erred in fact and in law by not exempting the arrangement as restructuring aid and by retroactively applying the Community guidelines on State aid for rescuing and restructuring firms in difficulty (OJ 2004 C 244, p. 2; ‘the 2004 Guidelines’).

1. The first plea: manifest error in the assessment of the amount of the aid measure in question

Arguments of the parties

46 The applicant maintains that the amount referred to in Article 1 of the contested decision, namely SKK 416 515 990, is manifestly incorrect. In its submission, the Commission ignored the decision of the Najvyšší súd Slovenskej republiky of 27 April 2006 which had reduced by SKK 424 490 the amount of the tax debt taken into account in the arrangement procedure. The correct amount is SKK 416 240 072. Consequently, the contested decision is vitiated by a manifest error of assessment. It, or at least Article 1 thereof, must therefore be annulled.

47 The Commission, supported by the intervener, disputes all the arguments raised by the applicant in support of the first plea.

Findings of the Court

48 It should be noted at the outset that in an action for annulment the legality of the measure concerned must be assessed in the light of the matters of fact and of law existing at the time when that measure was adopted (Joined Cases 15/76 and 16/76 France v Commission [1979] ECR 321, paragraph 7; Joined Cases T-371/94 and T-394/94 British Airways and Others v Commission [1998] ECR II‑2405, paragraph 81; Case T‑109/01 Fleuren Compost v Commission [2004] ECR II‑127, paragraph 50).

49 In particular, according to the case‑law, the legality of a decision concerning State aid is to be assessed in the light of the information available to the Commission when the decision was adopted (Joined Cases C‑74/00 P and C‑75/00 P Falck and Acciaierie di Bolzano v Commission [2002] ECR I‑7869, paragraph 168; see also, to that effect, Case 234/84 Belgium v Commission [1986] ECR 2263, paragraph 16).

50 An applicant cannot therefore rely, before the Court, on matters of fact which were not put forward in the course of the pre‑litigation procedure laid down in Article 88 EC (see, to that effect, Joined Cases C‑278/92 to C‑280/92 Spain v Commission [1994] ECR I‑4103, paragraph 31; Case C‑382/99 Netherlands v Commission [2002] ECR I‑5163, paragraphs 49 and 76; Fleuren Compost v Commission, paragraph 48 above, paragraph 51).

51 Similarly, it cannot be complained that the Commission failed to take into account matters of fact or law which could have been submitted to it during the administrative procedure but which were not, as the Commission is under no obligation to consider, of its own motion and on the basis of prediction, what information might have been submitted to it (Fleuren Compost v Commission, paragraph 48 above, paragraph 49 and the case-law cited).

52 In the present case, it is apparent from the summary of the decision to initiate the formal investigation procedure, which was published in the Official Journal (OJ 2005 C 233, p. 47), that in determining the amount of the State aid the Commission relied on the material set out in the decision of the Krajský súd v Košiciach of 14 July 2004 confirming the arrangement, material which was not called in question either by the Slovak Republic in its comments of 10 October 2005, or by the applicant in its comments of 24 October 2005.

53 Furthermore, it is not disputed that, when the Commission adopted the contested decision, it had not been informed either by the applicant or by the Slovak Republic of the decision of the Najvyšší súd Slovenskej republiky of 27 April 2006 reducing the amount of the applicant’s tax debt to be taken into account in the context of the arrangement procedure.

54 In the light of the case-law cited in paragraphs 48 to 50 above, the Commission cannot therefore be criticised for relying on the material set out in the decision of the Krajský súd v Košiciach of 14 July 2004 and for not taking into account the decision of the Najvyšší súd Slovenskej republiky of 27 April 2006 when determining the amount of the State aid. The first plea must therefore be rejected as unfounded.

2. The second plea: infringement of an essential procedural requirement and of Article 33 EC

Arguments of the parties

55 The applicant submits, first, that the contested decision is vitiated by an infringement of an essential procedural requirement and should therefore be annulled. It maintains that in so far as at the time the measure in question was taken it mainly produced agricultural products as defined under Annex I of the EC Treaty, Agriculture and Rural Development DG, and not Competition DG, was the competent Directorate‑General within the Commission to carry out the investigation and take the steps that led to the adoption of the contested decision. For those reasons, the decision to initiate the formal investigation procedure and the contested decision should have been signed by the Commissioner responsible for Agriculture and Rural Development and not by the Commissioner responsible for Competition. Secondly, the applicant complains that the Commission did not have regard, in the contested decision, to the objectives set out in Article 33 EC.

56 The Commission, supported by the intervener, contests all the arguments put forward by the applicants in support of the second plea.

Findings of the Court

57 As regards the first part of the second plea, alleging infringement of an essential procedural requirement, the Court observes that it is based on the premiss that, when the measure in question was granted, the applicant mainly produced agricultural products falling within Annex I of the EC Treaty, so that only the Agriculture and Rural Development DG and the Commissioner responsible for agriculture and rural development were competent to undertake an investigation into the measure in question and adopt the decision to initiate the formal investigation procedure and the contested decision.

58 As the Commission maintains, it is explicit from the applicant’s comments of 24 October 2005, and more specifically from table 1 in those observations, that, in 2004, the applicant’s total turnover amounted to approximately SKK 880.3 million and the turnover generated by activities related to the production of alcohol and spirits to approximately SKK 728.8 million. Those activities therefore accounted for over 82% of the applicant’s total turnover. It must be stated that, in view of that significant proportion of turnover generated by its activities related to the production of alcohol and spirits, the applicant has failed to show that its activities of producing agricultural products, which fell within Annex I to the EC Treaty when the measure in question was taken, were more significant than the first set of activities. Accordingly, in the light of the material in the file, it is clear that, at the material time, the majority of the applicant’s total turnover was derived from its activities related to the production of alcohol and spirits. The first part of the second plea must therefore be rejected as manifestly having no factual basis.

59 As regards the second part of the second plea, alleging that the Commission did not have regard to the objectives set out in Article 33 EC, it should be recalled that, under the first paragraph of Article 21 of the Statute of the Court of Justice of the European Union, applicable to the procedure before the General Court by virtue of the first paragraph of Article 53 thereof, and Article 44(1)(c) of the Rules of Procedure, each application is required to state the subject-matter of the dispute and a summary of the pleas in law on which the application is based. According to consistent case-law it is necessary, for an action to be admissible, that the basic matters of law and fact relied on be indicated, at least in summary form, coherently and intelligibly in the application itself (see Case T‑201/04 Microsoft v Commission [2007] ECR II‑3601, paragraph 94 and the case-law cited).

60 However, in the present case, the applicant did not put forward any matters of fact or law in support of its complaint alleging infringement of Article 33 EC. Accordingly, contrary to the requirements of Article 44(1)(c) of the Rules of Procedure, the applicant did not set out in summary form the second part of the second plea. The Court therefore rejects the second part of the second plea as manifestly inadmissible.

61 It is clear from the explanations above that both parts of the second plea must be rejected, the first part as manifestly lacking any factual basis and the second part as manifestly inadmissible.

3. The third plea: infringement of Section 3 of Annex IV to the Treaty of Accession, Article 253 EC, Article 88 EC and Regulation (EC) No 659/1999 inasmuch as the Commission lacked the competence to adopt the contested decision

Arguments of the parties

62 The applicant submits that the Commission lacked the competence to review the measure in question. It maintains that even if that measure constituted a State aid for the purposes of Article 87 EC, it was granted and put into effect when the Slovak tax authorities, prior to the accession of the Slovak Republic to the European Union on 1 May 2004 (‘the accession of the Slovak Republic’), had decided to discard the option of a bankruptcy procedure and that of a tax execution procedure. The applicant submits that, upon the opening of the arrangement procedure on 29 April 2004, it could legitimately have expected the Slovak tax authorities to take all formal steps necessary to implement the arrangement. After that date, the approval of the proposed arrangement at the arrangement hearing of 9 July 2004 was a mere formality. The applicant adds that the measure in question no longer applied as of that date. Consequently, that measure constitutes existing aid and not new aid, with the result that the Commission lacks the competence to request that it be recovered on the basis of Article 88(2) EC and Article 14 of Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1).

63 More specifically, the Commission’s position in the contested decision is contradictory as regards the point in time at which State aid was granted in the present case. On the one hand, the Commission cites Fleuren Compost v Commission, paragraph 48 above, as authority for its finding that the measure in question had been granted only at the time of adoption of the legally binding act, that is to say on 9 July 2004. On the other hand, the Commission based its finding that the measure in question constituted State aid on the ground that the Slovak tax authorities had failed to initiate ‘appropriate procedures prior to the commencement of the arrangement procedure’. It is apparent from the Commission’s administrative practice and the case-law that, in numerous cases, State aid was found to be granted through failure to act, even in the absence of a legally binding formal document.

64 Furthermore, the applicant maintains that the measure in question was no longer applicable after the accession of the Slovak Republic. In that regard it submits that the arrangement did not create any liability for the Slovak Republic post-accession as no payments and additional remissions were required.

65 The Commission, supported by the intervener, disputes all the arguments raised by the applicant in support of the third plea.

Findings of the Court

66 In recitals 61 to 68 of the contested decision, the Commission found that some of the relevant events in the present case took place before the accession of the Slovak Republic to the European Union. It then went on to state that the measures put into effect after that accession clearly did fall within the field of competence of the Commission under the EC Treaty and that, in order to determine the moment when a certain measure was put into effect, the relevant criterion was the legally binding act by which the ‘competent national authority undertakes to grant aid’. In the present case, it found, first, that the proposal to initiate the arrangement procedure was not an act of the ‘granting authority’, but an ‘act of the beneficiary’ and, second, that the decision of the court to commence the arrangement procedure was not an act of the ‘granting authority’. It also found that there was no evidence that the Slovak Tax Directorate expressed its agreement with the measure in question at the meeting in December 2003. On the contrary, the Slovak authorities denied any such preliminary agreement. According to the Commission, the ‘decision of the competent authority to write off some of its claims’ was taken on 9 July 2004, that is to say after the accession of the Slovak Republic, when the Tax Office agreed to the applicant’s proposed arrangement. The Commission therefore considered that it was competent to ‘assess’ the measure in question pursuant to Article 88 EC.

67 The third plea, alleging that the Commission lacked the competence to adopt the contested decision, is based on the premiss that the measure in question was granted before the accession of the Slovak Republic.

68 In order to rule on the merits of the third plea, the relevant criterion to be applied is the ‘legally binding act by which the competent national authority undertakes to grant aid’ (see, to that effect, Fleuren Compost v Commission, paragraph 48 above, paragraph 74).

69 In this respect, it is first of all necessary to identify the object of the measure in question. In the applicant’s submission, the measure in question was granted before the accession of the Slovak Republic, when the Tax Office decided not to initiate the bankruptcy procedure or the tax execution procedure.

70 However, as the Commission rightly observes, a decision of a Member State authority to refrain from initiating a bankruptcy procedure or a tax execution procedure is separate from a decision to approve a proposed arrangement, which in the present case involved the Tax Office waiving 65% of its claims over the applicant. While a decision of a creditor not to initiate a bankruptcy procedure or a tax execution procedure merely delays a possible forced recovery of the claim, a decision of that creditor to approve a proposed arrangement means, subject to confirmation of that arrangement by the competent court, that that creditor definitively waives all or part of that claim. Those two decisions are therefore clearly separate from one another.

71 Similarly, as is explicit both from the decision to initiate the formal investigation procedure and from the contested decision, the measure in question consists solely in the Tax Office waiving 65% of its claims over the applicant under an arrangement. In no event does the measure in question concern a decision of the Tax Office not to initiate a bankruptcy procedure or a tax execution procedure.

72 Accordingly, in order to assess the merits of the third plea, alleging that the Commission lacked the competence to adopt the contested decision, it is necessary only to determine at what point in time the Tax Office adopted its decision to approve the applicant’s proposed arrangement.

73 Principally, first, the Court observes that the applicant maintains that, in the decision of 29 April 2004, the Krajský súd v Košiciach authorised the arrangement procedure. By contrast, the Commission submits that, in that decision, the Krajský súd v Košiciach merely authorised the opening of the arrangement procedure. It is therefore necessary to examine the scope of the decision of the Krajský súd v Košiciach of 29 April 2004, since, in support of the third plea, the applicant claims that the measure in question was adopted before the accession of the Slovak Republic, so that the Commission lacked the competence to review the compatibility of that measure with the EC Treaty.

74 In this respect, first of all, it is apparent from the provisions of the Law on bankruptcy and arrangement with creditors, and in particular from Article 50 of that law, that, before any confirmation of an arrangement, the court must find in a decision that the conditions for opening an arrangement procedure have been satisfied. In no event can the decision of the Krajský súd v Košiciach of 29 April 2004 be considered to constitute a decision confirming the arrangement in the present case.

75 In fact, in accordance with the provisions of Article 58(1) of the Law on bankruptcy and arrangement with creditors, the creditors concerned who have adduced proof of their claims may make proposals or statements and cast votes in writing on the proposed arrangement, even before the arrangement hearing provided for in Article 58(2) of that law has been held.

76 Moreover, in accordance with Article 50(3)(b) and Article 58(2) of the Law on bankruptcy and arrangement with creditors, the opening of the arrangement procedure must enable the court to establish during an arrangement hearing which of the creditors concerned approve and which of the creditors concerned do not approve the proposed arrangement. It is only if the conditions as to majorities referred to in Articles 58a and 58b of the Law on bankruptcy and arrangement with creditors have been satisfied, and in compliance with the provisions of Articles 60 and 61 of that law, that the court can decide to confirm the arrangement. Accordingly, it is apparent from the provisions of the Law on bankruptcy and arrangement with creditors that it is only after the opening of an arrangement procedure and after the creditors concerned have adduced proof of their claims and have been requested, at the latest at an arrangement hearing, to vote in favour of the arrangement, that a decision confirming the arrangement can be adopted.

77 Next, it is apparent from the wording itself of the decision of the Krajský súd v Košiciach of 29 April 2004 that that court requested the creditors concerned to adduce proof of their claims in the context of the arrangement procedure within a period of 10 weeks, convened an arrangement hearing on 9 July 2004 and reproduced the arrangement conditions as set out in the applicant’s proposed arrangement of 8 March 2004.

78 Lastly, the Court would point out that, in its comments of 24 October 2005, the applicant stated that, on 29 April 2004, the Krajský súd v Košiciach had approved the first stage of the arrangement procedure, all the required substantive and procedural conditions having been met. The applicant added that the second stage of the arrangement procedure had been completed by the adoption of the decision of 14 July 2004 in which the Krajský súd v Košiciach had confirmed the arrangement.

79 In the light of the considerations set out in paragraphs 74 to 78 above, the Court finds that the decision of the Krajský súd v Košiciach of 29 April 2004 does not constitute a legally binding act within the meaning of the case-law cited in paragraph 68 above. By that decision, the Krajský súd v Košiciach merely found that, in the present case, the conditions for opening an arrangement procedure had been fulfilled.

80 Second, as regards the effects of a decision to open an arrangement procedure, it is common ground that, under the provisions of national law applicable in the present case, that decision deprives inter alia the debtor and its creditors of the right to initiate a bankruptcy procedure throughout the arrangement procedure. However, Article 66 of the Law on bankruptcy and arrangement with creditors provides that, where the proposed arrangement has not been approved by the creditors concerned, the court must terminate the arrangement procedure. From that point onwards, the creditors concerned are therefore entitled to initiate a bankruptcy procedure.

81 Third, it is undisputed that the Slovak tax authorities had the status of a preferential creditor in the present case. It is equally undisputed that, in accordance with the provisions of the Law on bankruptcy and arrangement with creditors, a proposed arrangement must be approved by the preferential creditors in order that the arrangement can be confirmed by the court. However, contrary to the applicant’s submission, there is nothing in the file to indicate that, before the adoption of the decision of the Krajský súd v Košiciach of 29 April 2004, the applicant received any guarantee from the Tax Office that its proposed arrangement of 8 March 2004 would be approved. The applicant is therefore wrong to submit that the measure in question was granted by the Slovak Republic before 1 May 2004.

82 In addition, the Court would point out that, as is apparent from recital 57 of the contested decision, the Slovak authorities twice formally indicated their opposition to the approval of the applicant’s proposed arrangement. By letter of 15 January 2004, the Slovak Minister for Finance requested the Slovak Tax Directorate not to agree to proposals for arrangements that would involve the writing-off of tax receivables. By letter of 6 July 2004, the Slovak Tax Directorate asked the Tax Office not to accept the arrangement proposed by the applicant.

83 Admittedly, it is apparent from the documents before the Court that, in its judgment of 6 March 2006, the Špeciálny súd v Pezinku found that the letters of 15 January and 6 July 2004 had no binding effect. However, even though those letters had no binding effect, such recommendations very clearly revealed the position of the Slovak Tax Directorate, the latter viewing unfavourably not only the applicant’s proposed arrangement, but also, more generally, any tax write‑off in the Slovak Republic. The Commission cannot therefore be criticised for relying, in the contested decision, on the letters of 15 January and 6 July 2004 as evidence showing that the Slovak authorities did not agree with the applicant’s proposed arrangement.

84 As is apparent from the documents before the Court, the Tax Office formally agreed to the applicant’s proposed arrangement only at the arrangement hearing of 9 July 2004. It is common ground that it is on the basis of unanimous approval of the applicant’s creditors that the Krajský súd v Košiciach adopted its decision confirming the arrangement on 14 July 2004.

85 Before 9 July 2004, the Slovak tax authorities, as a preferential creditor, could have opposed the applicant’s proposed arrangement, which would have automatically brought about the closure by the Krajský súd v Košiciach of the arrangement procedure opened on 29 April 2004. It is undisputed between the parties that, in the absence of such approval by the Tax Office, a preferential creditor of the applicant, the Krajský súd v Košiciach could not have confirmed the arrangement. Accordingly, until 9 July 2004, the Tax Office could have vetoed the applicant’s proposed arrangement and, consequently, would have been entitled to initiate either a tax execution procedure or a bankruptcy procedure after closure by the Krajský súd v Košiciach of the arrangement procedure. It is apparent moreover from the applicant’s comments of 24 October 2005 that it asserts, in order to show that the Tax Office was convinced that the solution of an arrangement, which the latter had approved on 9 July 2004, was preferable to that of bankruptcy, that the Tax Office could have intervened at various stages of the arrangement procedure to prevent that arrangement. That assertion clearly contradicts the applicant’s argument that the measure in question was granted before 29 April 2004.

86 It follows from all the foregoing that, in the present case, it is only from the point in time when the Tax Office formally approved the proposed arrangement, namely on 9 July 2004, that that office took its decision to waive 65% of its claims over the applicant. It was therefore after the accession of the Slovak Republic that the legally binding act by which the Slovak authorities undertook to grant the aid measure in question was adopted.

87 In conclusion, the third plea must be rejected as unfounded.

4. The fourth, fifth, sixth, seventh, eighth and ninth pleas, alleging, in essence, errors of law and fact in relation to the classification of the measure in question as State aid for the purposes of Article 87(1) EC

Preliminary observations

88 It should be noted that the fourth and fifth pleas allege, respectively, that the Commission erred in law and in fact when it found the bankruptcy procedure to be more advantageous than the arrangement procedure and that the Commission erred in law and in fact by finding the tax execution procedure to be more advantageous than the arrangement procedure.

89 It is apparent from recital 75 of the contested decision that, in order to examine whether the measure in question could be classified as State aid for the purposes of the provisions of Article 87(1) EC, the Commission used the test of a private creditor in a market economy. In this respect, it examined whether the return from the arrangement procedure for the tax authorities of the Slovak Republic exceeded that which they could have derived from a bankruptcy procedure or a tax execution procedure. It was therefore sufficient that one of those two procedures was more advantageous than the arrangement procedure for the Commission to be able to conclude that the test of a private creditor in a market economy had not been satisfied in the present case and, accordingly, that the measure in question constituted State aid for the purposes of Article 87(1) EC.

90 Furthermore, the Court observes that, in so far as they seek to challenge the legality of the contested decision inasmuch as it classifies the measure in question as State aid for the purposes of Article 87(1) EC, the sixth, seventh, eighth and ninth pleas are connected either with the fourth plea or with the fifth plea.

91 It is therefore necessary, first of all, as regards the fourth plea, and as regards the sixth, seventh, eighth and ninth pleas to the extent that they are connected with the fourth plea, to review the legality of the contested decision inasmuch as the Commission found the bankruptcy procedure to be more advantageous than the arrangement procedure.

92 It is only if it were to be established that the Commission was wrong to find that the bankruptcy procedure was more advantageous than the arrangement procedure that it would then be necessary to review the legality of the contested decision as regards the fifth plea, and as regards the sixth, seventh, eighth and ninth pleas to the extent that they are connected with the fifth plea, inasmuch as the Commission found the tax execution procedure to be more advantageous than the arrangement procedure.

The legality of the contested decision, inasmuch as the Commission found the bankruptcy procedure to be more advantageous than the arrangement procedure

The arguments expounded in the fourth plea

– Arguments of the parties

93 The applicant maintains that the arrangement did not confer a competitive advantage on it because the Slovak tax authorities had acted like a private creditor with the sole intention of maximising the return for the Slovak Republic. Not only was the arrangement not ‘manifestly more generous’ for the applicant, but it is also the obvious choice for any private creditor when having to decide between the immediate partial enforcement of a claim on the one hand and lengthy and costly bankruptcy proceedings with a high risk of receiving only an amount lower than that which he would receive pursuant to an arrangement on the other. In the contested decision the Commission reaches a different conclusion on the basis of an incorrect assessment of the facts, erroneous conclusions, unwarranted assumptions and uncorroborated statements made by a Member State, which, from the outset, and for reasons unclear but suspicious, admitted that it had granted unlawful State aid.

94 In the first place, the applicant alleges that the Commission did not take the duration of the bankruptcy procedure in Slovakia and third party reports in this regard into consideration. The applicant maintains that the most striking difference between the arrangement procedure and bankruptcy procedure concerns their respective duration. While, pursuant to the arrangement, the outstanding sums payable are paid to creditors within a few months, the proceeds from the sale of a debtor’s assets in a bankruptcy procedure are received by the creditors only after a much longer procedure. Moreover, in recital 54 of the contested decision, the Commission merely refers to the Slovak authorities’ view that, in the present case, because of the small number of creditors and the existence of assets with a positive liquidation value, a bankruptcy procedure would have been carried out in a shorter than average period. However, the Commission did not explain how these factors could shorten the length of the procedure. Furthermore, the applicant claims that the Commission admitted in the defence that it did not attempt to form a view on how long bankruptcy proceedings in respect of the applicant’s assets would be likely to last. It did not therefore take into consideration ‘lost interest income’ in its comparison of the bankruptcy procedure with the arrangement procedure.

95 In the applicant’s submission, even if those factors might have led to a faster than average bankruptcy procedure, it was still incumbent upon the Commission to have regard to the various factors of the case that could have lengthened the duration of that procedure. In this respect, it claims that, as most of its assets are special-purpose machines for the production and processing inter alia of beverages, the number of potential buyers was limited. Furthermore, the geographical location of those machines would have constituted a disadvantage in terms of transport and qualified personnel. It submits therefore that both its real estate and its production facilities had no value to any major spirits producer in Slovakia and would have been very difficult to sell.

96 The applicant maintains that information from various sources on the average duration of bankruptcy proceedings in Slovakia had been made available to the Commission during the investigation. First, it maintains that it sent to the Commission, as an Annex to its comments of 24 October 2005, a World Bank report of 2004 from which it was apparent that the average duration of bankruptcy proceedings in Slovakia, in a best-case scenario, was 4 years and 8 months. Furthermore, it is also apparent from a World Bank report of 2002, attached as an Annex to the application, that bankruptcy proceedings are the worst option for a creditor, take between 3 and 7 years, and preferential creditors report an unusually low rate of return on their claims of 5 to 10%, after payment of administrative costs. Secondly, the applicant observes that, in a report from 2004, which was provided to the Commission as an Annex to the applicant’s comments of 24 October 2005, the Slovak Ministry of Justice estimated the duration of bankruptcy proceedings in Slovakia to be between 3 and 7 years. Thirdly, it is apparent from the H report that [confidential]. Fourthly, the Commission referred, in its reports of 2002 and 2003 on the Slovak Republic’s progress towards accession to the European Union, to the concerns and improvements necessary as regards bankruptcy and insolvency procedures.

97 According to the applicant, even if the proceeds from the sale of its assets in a bankruptcy procedure set out in the contested decision were calculated on the basis of the coefficient applied in the E report, it is evident that even the most optimistic private creditor would have opted to receive SKK 225 million in December 2004 rather than potentially receiving up to SKK 239 million (SKK 275 million corresponding to the probable total proceeds from the sale of its assets in a bankruptcy procedure, minus a minimum of SKK 36 million corresponding to the costs of a bankruptcy procedure) at some time in a period between ‘shorter than the average’ and 7 years. The applicant claims that, in view of (i) the difference of SKK 14 million between the sum that could be obtained pursuant to the arrangement and that which could be obtained from bankruptcy and (ii) the discount rate of 5.1% applicable in March 2004, the bankruptcy procedure would have had to have lasted for no more than 13.5 months for a private creditor to opt for the bankruptcy procedure instead of the arrangement procedure. Such a short period is inconceivable in the present case.

98 In the second place, the applicant alleges that the Commission did not take the costs of bankruptcy proceedings in Slovakia and third party reports in this regard into consideration. The applicant maintains that those costs amounted, according to the E report, to SKK [confidential], that is to say [confidential] of the estimated proceeds of SKK [confidential] from the sale of its assets in such a procedure and, according to the K report, to SKK [confidential], that is to say [confidential] of the estimated proceeds of SKK [confidential] from the sale of its assets in such a procedure. The Commission subtracted from the estimated proceeds of SKK 275 million from the sale of the applicant’s assets in a bankruptcy procedure an amount of SKK 36 million corresponding to the costs of a bankruptcy procedure, an amount which, in actual fact, corresponds to the costs associated with estimated proceeds of SKK 204 million from the sale of its assets in a bankruptcy procedure. The relative proportion of costs as a percentage of those proceeds decreases as those proceeds increase. Therefore, the Commission erred in estimating the costs in the K report to be lower than those stated in the E report. The applicant adds that on the basis of the costs of a bankruptcy procedure in Slovakia as assessed in the 2004 World Bank report, corresponding to 18% of the proceeds from the sale of the assets in that procedure, the Commission stated that the expected total proceeds, on the basis of the 17 June 2004 data, was lower than or equal to the amount of the proceeds of the arrangement. The Commission’s argument that a bankruptcy administrator would have continued the production process is not ‘convincing’ in so far as the applicant’s licence for the production and processing of alcohol and spirits had been revoked and it could therefore no longer produce spirits.

99 In the third place, the applicant complains that the Commission did not take into consideration the additional labour and operating costs with which the applicant would have been faced if a bankruptcy procedure had been initiated. The applicant claims that, not only would it have had to continue to pay the wages of its workers and the operating costs but, in addition, it might have had to gradually terminate the contracts of employment and, on that basis, pay severance payments.

100 In the fourth place, the applicant complains that the Commission did not take a precedent on the Slovak spirit market into consideration, which a reasonable private creditor would have taken into account. In that respect it states that, in its comments of 24 October 2005, it referred the Commission to the declared bankruptcy of Liehofruct White Lady Distillery, s.r.o. Levoča (‘Liehofruct’). The applicant submits that that undertaking had, like the applicant, become the owner of a spirits distillery formerly owned by the State and adds that ‘the tax authorities were also the major creditors’. It observes that the Liehofruct bankruptcy procedure commenced in July 1999, that the assets had not been liquidated even after 10 rounds of auctions, during which the highest offers did not exceed 30% of the estimated value of the undertaking and that, after 8 years, the procedure has still not been closed. That proves that it was not easy to find a buyer for a distillery with outdated equipment in the east of Slovakia.

101 In reply to the Commission’s argument that it did not explain in what respect the Liehofruct bankruptcy was similar to its own, the applicant submits that it was the Commission’s duty to investigate that very question and that its failure to do so constitutes a manifest error. The applicant also disputes the Commission’s assertion that the assets would have been sold at the market price. In the applicant’s submission, every reasonable private creditor would have to expect that the sale price of the assets of its debtor in a bankruptcy sale will be lower than the normal market price.

102 In the fifth place, the applicant submits that the Commission did not have regard to the report of the Slovak Ministry of Justice of 2004, referred to in paragraph 96 above, according to which preferential creditors very rarely managed to recover more than between 5 and 10% of their claims over an insolvent debtor in a bankruptcy procedure. That pessimistic assessment contradicts the extremely positive assessment by the Slovak authorities of the bankruptcy procedure in the present case. By failing to identify that discrepancy, the Commission therefore committed a manifest error of assessment.

103 In the reply, the applicant states that the assessment that it possessed liquid assets of SKK [confidential] took account of the postponement of payment dates granted by Old Herold following the proposed arrangement, the amount of which was initially due in July 2004. Without denying the existence of those liquid assets, the applicant submits that in bankruptcy proceedings Old Herold, in its capacity as a creditor, would also have had to be paid. A reasonable private creditor would not therefore have expected to sell the non‑current assets, stock and short‑term receivables for an amount that exceeded SKK 63.3 million, and after having deducted wage, administrative and legal costs as well as the partial payment of the existing creditors, which would have included Old Herold. The applicant maintains that the approximate amount of SKK [confidential] obtained from the sale of its stock to Old Herold was based on a long-term agreement concluded with Old Herold and on the latter’s belief that the arrangement would be successful. Old Herold would not have purchased that stock in a bankruptcy situation. It is therefore not legitimate to take into account such monies when assessing the ‘potential financial return’ from a bankruptcy procedure.

104 The applicant adds that the Commission’s statement that, as regards the liquid assets, the tax execution could have been carried out through simple dispossession is not relevant since those liquid assets were earmarked for the Slovak tax authorities in any event.

105 The Commission, supported by the intervener, disputes all the arguments raised by the applicant in support of the fourth plea.

– Findings of the Court

106 In the first place, it should be noted that, as was pointed out in paragraph 49 above, the legality of a decision concerning State aid is to be assessed in the light of the information available to the Commission when the decision was adopted.

107 Next, it is undisputed that the measure in question, which consists of the remission of a debt by the creditors in the context of the arrangement approved by them, conferred an advantage on the applicant. However, the parties disagree on whether, in the present case, in the light of the test of a private creditor in a market economy, the applicant would have obtained such an economic advantage under normal market conditions and, therefore, on whether that measure constitutes State aid for the purposes of Article 87(1) EC.

108 In that regard, it must be borne in mind that, in so far as the Commission’s application of the test of a private creditor in a market economy involves complex economic appraisals, like the application of the test of a private investor in a market economy, when reviewing it the Court must, according to a consistent line of decisions, confine itself to verifying whether the Commission complied with the relevant rules governing procedure and the statement of reasons, whether the facts have been accurately stated and whether there has been any manifest error of assessment of those facts or a misuse of powers (see Case T‑36/99 Lenzing v Commission [2004] ECR II‑3597, paragraph 150 and the case-law cited, upheld by the Court of Justice in Case C‑525/04 P Spain v Lenzing [2007] ECR I‑9947, paragraph 59).

109 It must also be borne in mind that, whilst the Court of Justice recognises that the Commission has a margin of discretion with regard to economic matters, that does not mean that the Courts of the European Union must refrain from reviewing the Commission’s interpretation of information of an economic nature (Case C‑12/03 P Commission v Tetra Laval [2005] ECR I‑987, paragraph 39, and Spain v Lenzing, paragraph 108 above, paragraph 56).

110 According to the case-law of the Court of Justice, not only must the Courts of the European Union establish whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it (see, to that effect, Case 98/78 Racke [1979] ECR 69, paragraph 5; Case C‑16/90 Nölle [1991] ECR I‑5163, paragraph 12; and Case C‑326/05 P Industrias Químicas del Vallés v Commission [2007] ECR I‑6557, paragraph 76). However, when conducting such a review, the Courts of the European Union must not substitute their own economic assessment for that of the Commission (order in Case C‑323/00 P DSG v Commission [2002] ECR I‑3919, paragraph 43).

111 Lastly, where a Community institution has a wide discretion, the review of observance of certain procedural guarantees is of fundamental importance. Thus, the Court of Justice has had occasion to specify that those guarantees include the obligation for the competent institution to examine carefully and impartially all the relevant elements of the individual case and to give an adequate statement of the reasons for its decision (see Case C‑269/90 Technische Universität München [1991] ECR I‑5469, paragraph 14, and Joined Cases C‑258/90 and C‑259/90 Pesquerias De Bermeo and Naviera Laida v Commission [1992] ECR I‑2901, paragraph 26).

112 Accordingly, in so far as the Commission found that the test of a private creditor in a market economy had not been satisfied, the review of the legality of the contested decision must be confined to verifying whether the Commission committed a manifest error in the assessment of the facts.

113 In the second place, in order to undertake that review of legality, it is necessary inter alia to take account of the following four parameters in the present case.

114 The first parameter is the – uncontested – fact that the Slovak tax authorities, which granted the measure in question, have the status of creditor. According to settled case‑law, a public body which has granted a debt remission should be compared to a private creditor who is seeking to obtain payment of sums owed to it by a debtor in financial difficulties. The status of creditor should be distinguished from that of a private investor in a market economy pursuing a structural policy – whether general or sectoral – guided by the longer-term prospects of profitability of the capital invested (see, to that effect, Case T‑152/99 HAMSA v Commission [2002] ECR II‑3049, paragraph 167 and the case-law cited).

115 The second parameter is the – uncontested – fact that the public authority which granted the measure in question is a preferential creditor. It should be borne in mind that, when a firm faced with a substantial deterioration of its financial situation proposes an agreement or series of agreements for debt arrangement to its creditors with a view to remedying the situation and avoiding liquidation, each creditor must make a decision having regard to the amount offered to it under the proposed agreement, on the one hand, and the amount it expects to be able to recover following possible liquidation of the firm, on the other. Its choice is influenced by a number of factors, such as the creditor’s status as a secured, preferential or ordinary creditor, the nature and extent of any security it may hold, its assessment of the chances of the firm being restored to viability, as well as the amount it would receive in the event of liquidation (HAMSA v Commission, paragraph 114 above, paragraph 168).

116 The third parameter is the Commission’s particularly cautious assessment of the proceeds from the sale of the applicant’s assets in a bankruptcy procedure. In this respect, the Court finds that the proceeds from a bankruptcy procedure, as assessed by the Commission in table 4 of the contested decision, namely SKK 275 million, represented a minimum assessment. The book value of the applicant’s assets set out in that table was based (i) to a very large extent on the data provided by the applicant and (ii) as regards the 17 June 2004 data, on the results of the inspection that the Slovak tax authorities had carried out in the applicant’s premises on 21 June 2004.

117 In this respect, the Court notes that the applicant does not challenge the validity of the data collected by the Slovak tax authorities at its inspection of 21 June 2004. Moreover, not only did the Commission display extreme caution when valuing the assets, as is apparent in particular from footnotes 20 and 23 of the contested decision, but it also applied in that table, as is apparent from recitals 84 to 87 of the contested decision, the liquidation factors used in the E report, even though it considered those factors to be too low.

118 Moreover, in table 4 of the contested decision, the Commission presented a valuation of the proceeds from the sale of the applicant’s non‑current assets as at 17 June 2004 in a bankruptcy procedure at SKK 90 million, whilst their book value amounted to SKK 200 million. As is apparent from recital 87 of the contested decision, the Commission maintains that, since those claims were secured, in the applicant’s own submission, in the amount of at least SKK 194 million, the amount of the proceeds that the applicant would have been able to derive from the liquidation of the non‑current assets ought to have been at least equal to the value of those secured claims. However, in table 4 of the contested decision, the Commission took care to apply the liquidation factor used in the E report.

119 Lastly, in table 4 of the contested decision, the Commission applied a liquidation factor of 20%, set out in the E report, to calculate the proceeds from the sale of the applicant’s stock in a bankruptcy procedure, even though, on 17 June 2004, the book value of that stock had diminished by SKK 125 million, that is to say a reduction of 60% in comparison with the stock which existed in March 2004.

120 It is apparent from the foregoing considerations that the Commission regarded the assessed value of the proceeds from the sale of the applicant’s assets in a bankruptcy procedure as at 17 June 2004, as that assessment emerges from table 4 of the contested decision, as the strict minimum that a private creditor would have taken into consideration in order to assess the advantages of a bankruptcy procedure in comparison with the proceeds from the arrangement approved on 9 July 2004.

121 The fourth parameter is the partial remission of the applicant’s debt. Unlike an arrangement procedure, a bankruptcy procedure does not enable a debtor to obtain from its creditor a debt remission. In other words if, at the end of the bankruptcy procedure, the proceeds from the sale of a debtor’s assets have not sufficed to pay off all its creditors, those creditors can still require from the debtor repayment of the outstanding sums due.

122 It is therefore appropriate to examine the applicant’s arguments under the fourth plea in the light of the foregoing considerations.

123 First, as regards the applicant’s argument that the Commission did not take the duration of a bankruptcy procedure in Slovakia and third party reports in this regard into consideration, the Court would point out first of all that, contrary to the applicant’s submission, the Commission not only stated, in recital 54 of the contested decision, that, according to the Slovak Republic, the duration of a bankruptcy procedure would have been lower than average in the light of the specific circumstances of the case, but also mentions, in recital 40 of the contested decision, that, according to the applicant, the bankruptcy procedure lasts on average 3 to 7 years in Slovakia. The Commission stated that the applicant based its position on material, statistics and an example of a Slovak company allegedly in a similar situation to its own. It cannot therefore be alleged that the Commission ignored that question and the applicant’s position in this respect.

124 In addition, as regards the evidence available to the Commission, the Court would point out that the data, which were themselves provided by the applicant, do not satisfy the requirements of reliability and consistency. The assessments of the duration of a bankruptcy procedure in Slovakia that the applicant submitted to the Commission were general and did not take account of the characteristics of this case. Similarly, some of those assessments were of an approximate nature and, to a certain extent, were inconsistent with one another. The applicant relies on four reports, referred to in paragraph 96 above, in which that duration was assessed variously at 4 years and 8 months, at a period of between 3 years and 7 years, or at more than 6 years.

125 The other reports to which the applicant refers are the Commission reports of 2002 and 2003 on the Slovak Republic’s progress towards accession to the European Union. The applicant submits that in those reports the Commission referred to the concerns and improvements necessary as regards bankruptcy and insolvency procedures in Slovakia. However, it must be pointed out that those Commission reports relate to the bankruptcy procedure in Slovakia in general and do not take account of the characteristics of this case.

126 Moreover, the Court observes that the applicant failed to refer to the results of the K report in relation to the possible duration of a bankruptcy procedure concerning it. In that report, which the applicant itself submitted in this case, that duration was assessed at ‘ca. 2 years (depending on conditions and trustee’s work)’. The Court would point out that not only was that assessment of the duration of such a bankruptcy procedure clearly much more optimistic than the other assessments submitted by the applicant but it also referred specifically to the applicant.

127 In addition, as the Commission maintains, where, as is the case here, the number of the debtor’s creditors is small and there are assets with a positive liquidation value, the bankruptcy procedure can be carried out in a shorter than average period. That is especially true in the present case since it is undisputed between the parties that the Slovak tax authorities’ claim over the applicant represented approximately 99% of the applicant’s liabilities and that those authorities had the status of a preferential creditor. It follows that the Slovak tax authorities would have had a decisive influence on the duration of the bankruptcy procedure. It is true that the applicant asserts that the characteristics, the geographical location and the outdated nature of most of its assets would have made it difficult to find a buyer and, therefore, slowed down the course of the bankruptcy procedure. However, as the Commission stated in recital 88 of the contested decision, several factors, and in particular the fact that some of the applicant’s production assets found a user after the withdrawal of its licence for the production and processing of alcohol and spirits, tend to show that that assertion of the applicant is unfounded.

128 Lastly, as regards whether the most optimistic private creditor would have opted to receive SKK 225 million in December 2004 rather than potentially receiving up to SKK 239 million at some time in a period between ‘shorter than the average’ and 7 years, it should be borne in mind, as is observed in paragraphs 116 to 120 above, that the proceeds from the sale of the applicant’s assets in a bankruptcy procedure, as assessed by the Commission, namely SKK 275 million, represented a minimum assessment. Accordingly, the applicant’s calculation, in the light of the duration of the bankruptcy procedure and the proceeds that a private creditor might have expected from the sale of the applicant’s assets in a bankruptcy procedure with account being taken of the relevant interest income, is irrelevant in the light of the circumstances of the present case and in particular of the caution displayed by the Commission regarding the assessment of those proceeds.

129 It follows from the foregoing that the Commission did not commit a manifest error in its assessment of the duration of the bankruptcy procedure.

130 Second, as regards the applicant’s argument that the Commission did not take the costs of bankruptcy proceedings in Slovakia and third party reports in this regard into consideration, the applicant maintains that, according to the E report, those costs represented 22% of the estimated proceeds of SKK 204 million from the sale of its assets in such a procedure and, according to the K report, 28% of the estimated proceeds of SKK 78 million from the sale of its assets in such a procedure.

131 In this respect, the Court would point out first of all that the rate of 28% on which the applicant relies is manifestly incorrect. As is apparent from the K report, the proceeds from the sale of the applicant’s assets in a bankruptcy procedure, under variant III, were assessed at SKK 100 million. In order to calculate those proceeds, the auditor subtracted SKK 22 million corresponding to the costs of the bankruptcy procedure. Those costs therefore represented 22% and not, as the applicant claims, 28% of the proceeds from the sale of its assets in such a procedure.

132 The applicant also complains that the Commission subtracted from the estimated proceeds of SKK 275 million from the sale of the applicant’s assets in a bankruptcy procedure an amount of SKK 36 million in respect of the costs of such a procedure. In the applicant’s submission, that amount of SKK 36 million corresponded to the costs associated with estimated proceeds of SKK 204 million from the sale of its assets in a bankruptcy procedure.

133 In this respect, the Court notes that, in recital 89 of the contested decision, the Commission found as follows:

‘In addition, the credibility of [E’s] report is also affected by the manner of calculating the various fees involved in a bankruptcy procedure that were to be subtracted from the total yield from the sale of the assets. Whereas [the company E] deducted SKK 45 million in fees, the [applicant] in its submission gave the figure of SKK 36 million and the estimate of [its internal auditor, Ms K.] is SKK 22 million at most. Such discrepancies raise doubts as to the accuracy of [the company E’s] assumptions regarding the level of the fees and, therefore, also the level of the yield that could have been obtained in a bankruptcy procedure. It is noted, nevertheless, that, considering the [applicant’s] situation on 17 June 2004, even with fees of SKK 36 million, the yield in bankruptcy would have been higher than with the proposed arrangement.’

134 The applicant is right to complain that the Commission compared the two relative values of the costs of a bankruptcy procedure as calculated in the E report and the K report without taking account of the fact that those values had been calculated in proportion to two absolute values, namely the proceeds from the sale of the applicant’s assets in a bankruptcy procedure as estimated in those reports, which were not comparable. The applicant is therefore also right to challenge the reasons that led the Commission to disregard the data in those reports in this regard. As is apparent from paragraphs 130 and 131 above, in those two reports, the costs of a bankruptcy procedure represented 22% of the estimated value of the proceeds from the sale of the applicant’s assets in the bankruptcy procedure set out in those reports.

135 Similarly, it is necessary to reject as unfounded the Commission’s argument that during the investigation procedure the applicant merely specified that, for proceeds of SKK 203.6 million, the remuneration of the bankruptcy administrator would have been 1.9% of the proceeds, without indicating the likely level of all the other costs. It is explicitly clear from paragraph 50 of the applicant’s comments of 24 October 2005 that it stated that the costs of bankruptcy, estimated at approximately 18%, would amount to SKK 32 million, in addition to the remuneration of the bankruptcy administrator, estimated at SKK 3.8 million (that is to say 1.9% of the estimated proceeds of SKK 203.6 million from the sale of the applicant’s assets in a bankruptcy procedure).

136 However, it should be pointed out that, in recital 89 of the contested decision, the Commission not only expressly took account of the fact that the applicant had given a figure of SKK 36 million for the costs of a bankruptcy procedure, but also states that, even if those costs are subtracted from the proceeds of the sale of the applicant’s assets in such a procedure, the sum obtained by the Slovak authorities would have been higher than the sum proposed in the arrangement procedure. It is apparent from paragraph 50 of the applicant’s comments of 24 October 2005 that the estimate of the costs of the bankruptcy procedure at SKK 36 million resulted from the addition of the remuneration of the bankruptcy administrator and the costs of bankruptcy (SKK 3.8 million + SKK 32 million = SKK 35.8 million). Moreover, it cannot be disputed that that assessment of the costs of a bankruptcy procedure was based on estimated proceeds of SKK 204 million from the sale of the applicant’s assets in that procedure.

137 As the applicant itself acknowledges in its pleadings, the relative proportion of the costs of a bankruptcy procedure as a percentage of the proceeds from the sale of the debtor’s assets decreases as those proceeds increase. By using SKK 36 million as the amount to subtract from proceeds of the sale of the applicant’s assets in the bankruptcy procedure in which the proceeds were estimated at SKK 275 million, the Commission would thus have arrived at a proportion of the costs of a bankruptcy procedure also equivalent to 13% of those proceeds (SKK 275 million – SKK 36 million = SKK 239 million). If the Commission had deducted an amount corresponding to 18% of those proceeds, that is to say the rate that the applicant considers to be appropriate in the light of the World Bank report of 2004, the Commission would indeed have had to find that the proceeds from the sale of the applicant’s assets in a bankruptcy procedure, after deduction of the costs relating thereto, would have been SKK 225.5 million. None the less, although that amount is virtually equal to the amount repaid to the creditors pursuant to the arrangement, account should be taken of the fact that, as was observed in paragraphs 116 to 120 above, the Commission displayed extreme caution when estimating the proceeds from the sale of the applicant’s assets in a bankruptcy procedure. The Court therefore finds that, in the present case, the sum that the Slovak authorities would have been able to obtain from the sale of the applicant’s assets in a bankruptcy procedure, after deduction of the costs relating thereto, was necessarily higher than the sum that they obtained pursuant to the arrangement. It is apparent from the foregoing arguments that the Commission did not manifestly err in finding that the proceeds from the sale of the applicant’s assets in a bankruptcy procedure, after deduction of the costs relating thereto, would have been more advantageous than the amount obtained by the Slovak authorities pursuant to the arrangement.

138 Third, the applicant cannot succeed in arguing that the Commission did not properly take into consideration the additional labour and operating costs with which the applicant would have been faced if bankruptcy proceedings had been initiated. The applicant’s claims are not supported by any evidence. Furthermore, the applicant does not contest that, as the Commission maintains, notwithstanding the loss of its licence for the production and processing of alcohol and spirits on 6 March 2004, it pursued its other production and distribution activities, which necessarily meant that turnover was being generated which could cover part of the personnel and operating costs.

139 Fourth, as regards the applicant’s argument that the Commission did not take a precedent in the Slovak spirit market into consideration, namely the declared bankruptcy of Liehofruct, it must be stated that, contrary to the applicant’s assertion, the Commission did not ignore that precedent in the contested decision.

140 In fact, in footnote 9 which appears under recital 40 of the contested decision, the Commission stated, as regards the applicant’s arguments on the duration of a bankruptcy procedure in Slovakia and the proceeds from the sale of the applicant’s assets in a bankruptcy procedure in Slovakia, that ‘[the applicant] gives an example of a company owning similar assets and operating in the same sector …’. It is apparent from the applicant’s comments of 24 October 2005 that the only precedent in Slovakia on which the applicant relied relates to Liehofruct. The Court therefore finds that the example cited by the Commission in the contested decision relates to the bankruptcy of Liehofruct.

141 In addition, it is apparent from paragraph 43 of the applicant’s comments of 24 October 2005 that the applicant had not, at that stage of the investigation procedure, sent to the Commission information which would have made it possible to establish, as the applicant submits, that the situation of Liehofruct was similar to its own.

142 Furthermore, the applicant is wrong to submit that it was the Commission’s duty to investigate that very question and that its failure to do so constitutes a manifest error. According to the case‑law, the Commission is under no obligation to consider, of its own motion and on the basis of prediction, what information might have been submitted to it (see Fleuren Compost v Commission, paragraph 48 above, paragraph 49 and the case-law cited to that effect).

143 Lastly, contrary to the applicant’s submission, it is not apparent from the Commission’s pleadings that the Commission claims that the sale of the applicant’s assets in a bankruptcy procedure would have generated an amount equal to their market price. It is apparent from paragraph 123 of the defence that the Commission merely claimed that, in the light of its status as a preferential creditor, the Slovak tax authorities could have received close to 100% of the proceeds from the sale of the applicant’s assets in a bankruptcy procedure, as assessed, in the table above paragraph 123 of the defence, at the market value after application of the liquidation factors. In addition, as is apparent from the contested decision and, in particular, from table 4 thereof, the Commission did not dispute that it was necessary to apply a liquidation factor to the book value of the applicant’s assets in order to assess their market value.

144 Fifth, as regards the applicant’s argument that the Commission did not have regard to the report of the Slovak Ministry of Justice of 2004, according to which, in a bankruptcy procedure, preferential creditors very rarely managed to recover more than between 5 and 10% of their claims over an insolvent debtor, the Court would point out that, as the Commission maintains, that report was of a general nature and was not designed to assess the specific situation of the applicant and the characteristics of its principal creditor, the Slovak tax authorities. In addition, the information provided by the Slovak Republic to the Commission in the investigation procedure related necessarily to the applicant’s specific situation and took account of the specific status of its principal creditor. It cannot therefore be complained that the Commission committed a manifest error in not taking account of the report of the Slovak Ministry of Justice of 2004.

145 Lastly, sixth, as regards the applicant’s assertion that the assessment – which it does not contest – that it possessed liquid assets as at 17 June 2004 of SKK [confidential] took account of the postponement of payment dates granted by Old Herold following the proposed arrangement, the Court notes that, as the Commission observes, that claim is not backed up by any material in the file supporting the conclusion that the Commission ought to have taken account of the fact that part of those liquid assets were allegedly the result of such a postponement.

146 First of all, it is not apparent from the material in the file that, during the procedure, the applicant ensured that the Commission was informed on that specific point. Next, the Court considers, like the Commission, that the applicant’s argument in its pleadings by which it seeks to justify its assessment of the amount of the liquid assets allegedly resulting from the postponement of payment dates granted by Old Herold is confused, or even contradictory.

147 In this respect, it must be observed, as the Commission states, that, in the application, the applicant asserts that Old Herold’s claim amounted to SKK [confidential] on 31 July 2004 and that that claim continued to increase and was SKK [confidential] at the time of execution of the arrangement in December 2004. Accordingly, the applicant cannot now claim, without contradicting itself, that the entirety or a significant part of the liquid assets at its disposal on 17 June 2004 could not be taken into account, since it resulted from the postponement of payment dates granted by Old Herold. In addition, the fact that the applicant submits, as set out in paragraph 104 above, in support of the fifth plea, that those liquid assets were in any event earmarked for the Slovak tax authorities accentuates the confused and contradictory nature of its arguments in this regard. In view of the foregoing considerations, it must be held that the applicant is clearly not able to justify why the liquid assets at its disposal on 17 June 2004 could not be taken into account in a potential bankruptcy procedure.

148 Furthermore, it is apparent from the data contained in table 4 of the contested decision, which was drawn up, as is apparent from recitals 80 and 82 of the contested decision, on the basis inter alia of the liquidation factor and the data in the E report regarding the situation on 31 March 2004, that, on the one hand, between 31 March and 17 June 2004, the book value of the applicant’s stock diminished by SKK 125 million, that is to say by slightly more than 40%. Thus, the conditions under which the applicant’s stock