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restructuring directive info corner

Restructuring Directive: A game changer for restructurings?

In view of the adverse economic consequences of the COVID-19 pandemic and once governmental support programmes come to an end, many expect a "wave of insolvencies" to commence in 2021. So it comes just in time that EU Member States must implement (most of) the Directive (EU) 2019/1023 on restructuring and insolvency (Restructuring Directive) until July 2021 (with an extension option for up to one year).

The Restructuring Directive establishes uniform rules for preventive restructuring frameworks that aim at avoiding (the stigma of) insolvency proceedings.  

Preventive restructurings enable debtors in financial difficulties to avoid insolvency proceedings and to continue their businesses on the basis of an agreed restructuring plan. The adoption of that restructuring plan requires the vote of the majority (usually 75%) of affected creditors.

The Restructuring Directive provides a diverse toolkit for preventive restructurings. Key features of preventive restructuring frameworks include the suspension of creditor enforcement actions and of the obligation to file for insolvency. Also, ipso facto clauses (that permit contract termination or modification on insolvency) will be overridden. Most importantly, the Restructuring Directive provides for (cross-class) cramdown and certain protections for new and interim financings.

If implemented wisely in national laws, the new restructuring frameworks could be real game changers for restructurings in the European Union.

Member States have started working on transposing the Restructuring Directive into national laws since 2019. Whereas in some Member States preventive restructuring frameworks have already been in in place since quite a time, most Member States are required to create a completely new legal framework for preventive restructurings.

See below the status of the implementation of the Restructuring Directive in CEE as of 1 April 2021:

Preventive restructuring framework already implemented according to the Restructuring Directive.

Expert group set up by the government has completed its work and/or publication of the legislative proposal is expected soon.

Expert group has been set up by the government working on a legislative proposal.

No information publicly available about the current status of the implementation / no works have started yet.

*

Pre-insolvency restructuring frameworks covering (some of) the tools provided for in the Restructuring Directive, already exist.

Non-EU Member State; no legal preventive restructuring framework similar to the Restructuring Directive available.


 

publications

newsletter

23 February 2021

austria

W.Höller M.Simsa M.Ebner

Newsflash: Keine Macht dem hold-out – die neue Restrukturierungsordnung

Am 23.02.2021 wurde der lang erwartete Entwurf der Restrukturierungsordnung veröffentlicht. Mit dem Entwurf soll die Richtlinie (EU) 2019/1023 (RestrukturierungsRL) in Österreich umgesetzt werden.

more
roadmap

Implementation of EU Restructuring Directive – Room for policy decisions?

more
roadmap

The Restructuring Directive: Where do we go from here?

Pre-insolvency restructuring frameworks: The race has begun – with some early front runners

 

more
newsletter

24 June 2019

austria

W.Höller P.Wetter

New EU Restructuring Directive: A game changer for restructurings?

The list of successful restructurings outside insolvency proceedings is as long as it is confidential. Every year, companies of all sizes are stabilised and sustainably restructured without the stigma of insolvency proceedings.

more

If you have any questions about the Restructuring Directive, please feel free to contact us!

 

Austria

Martin
Ebner

Partner

austria vienna

Wolfgang
Höller

Partner

austria vienna

Philipp
Wetter

Attorney at Law

austria vienna

Bulgaria

Tsvetan
Krumov

Attorney at Law

bulgaria

Bosnia & Herzegovina

Minela
Šehović

Attorney at Law

bosnia & herzegovina

Croatia

Ozren
Kobsa*

Attorney at Law in cooperation with Schoenherr

croatia

Ana Marija
Rupčić*

Associate | Vlahov Buhin i Šourek d.o.o. in coop. with Schoenherr

croatia

Czech Republic

Ondřej
Havlíček

Attorney at Law

czech republic

Natálie
Rosová

Attorney at Law

czech republic

Hungary

Gergely
Szalóki

Local Partner

hungary

Virág
Palguta

Attorney at law

hungary

Montenegro

Petar
Vučinić

Associate

montenegro

Poland

Paula Weronika
Kapica

Attorney at Law

poland

Romania

Slovakia

Soňa
Hekelová

Local Partner

slovakia

Alexandra
Adamičková

Associate

slovakia

Slovenia

Vid
Kobe

Partner in cooperation with Schoenherr

slovenia

North Macedonia

Andrea Lazarevska
Associate (Belgrade)
T: +389 2 3220 101
E: A.Lazarevska@schoenherr.eu 

Magdalena Petreska
Associate (Belgrade)
T: +381 60 3202 654
E: M.Petreska@schoenherr.eu 

Serbia

Nikola Babić
Partner (Serbia) (Belgrade)
T: +381 11 3202 600
E: N.Babic@schoenherr.eu 

Jovan Barović
Attorney at Law (Belgrade)
T: +381 11 3202 622
E: J.Barovic@schoenherr.eu 

Petar Kojdic 
Partner (Belgrade)
T: +381 11 3202 637
E: P.Kojdic@schoenherr.eu 

Dušan Obradović
Attorney at Law (Belgrade)
T: +381 11 3202 600
E: D.Obradovic@schoenherr.eu