The EU Restructuring Directive 2019/1023

The EU Directive 1023/2019, inspired by the Chapter 11 of the US Bankruptcy Code, introduced a set of principles rules and practices concerning a modern corporate rescue and restructuring approach that all EU Member States have transposed into their national insolvency laws. Since the EU insolvency panorama presents significant cultural differences among jurisdictions, the introduction of preventive restructuring frameworks has contributed to the pursuit of the Directive’s goal of improving the functioning of the internal market and facilitating the exercise of fundamental freedoms. This study analyses the discipline of the Directive and its impact on the national insolvency laws of Germany, France, Spain, Italy and the UK. Despite the peculiarities that distinguish each of the jurisdictions investigated, the study highlighted how the reforms on corporate restructuring have succeeded in achieving a good level of harmonisation of European insolvency law. The rescue of the company as a going concern that remains in the entrepreneur’s managerial control (debtor-in-possession principle), the introduction of a moratorium offering the debtor a ‘breathing space’ from the claims of creditors, early warning mechanisms to detect financial difficulties at an early stage and the Restructuring Plan as a legal instrument encompassing the will of all actors involved in the restructuring, are today the pillars characterising the European insolvency law. In addition, the transposition of the Directive has also balanced the protection of the creditors’ interest in satisfying their claim and the debtor’s interest in saving the company and having a second chance.