EU's insolvency harmonisation plan unpicked

Author: | Published: 23 Feb 2017

The EU draft directive, inspired by US chapter 11 calls for a shift in some member states’ restructuring practices. It shouldn’t be underestimated

The key aim of the draft EU directive for the harmonisation of restructuring laws is to make sure that all member states offer certain minimum levels of preventive or pre-insolvency court-supported restructuring measures to debtors doing business in their jurisdictions. The draft directive appeared under an expedited timetable on November 22 2016 as it now forms part of the capital market union (CMU) plan. This is because a lack of a harmonised approach to restructuring and insolvency laws is seen as preventing the CMU's proper functioning and development.

Corporate preventive measures

The draft directive has the following cornerstones which rely heavily on the US chapter 11 reorganisation proceedings for their inspiration:

the stay on individual enforcement while a restructuring is negotiated; the approval of the restructuring plan,...



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