On 7 December, the European Commission published its proposal for a directive harmonising certain aspects of insolvency law. This directive seeks to advance the Capital Markets Union (CMU) agenda by furthering the integration of insolvency rules that have historically differed substantially across member states across the European Union.  The directive proposes rules for minimum harmonisation in relation to three areas of corporate insolvency law: (i) the recovery of assets from the liquidated insolvency estate; (ii) the efficiency of proceedings; and (iii) the predictable and fair distribution of recovered value among creditors.  Notable takeaways from the proposals include:

• The introduction of minimum common features of pre-pack proceedings including the preparation and liquidation phase.
• Member states will be mandated to digitally submit key information factsheets on national insolvency law.
• A requirement for directors to request insolvency proceedings within 3 months of becoming aware of the legal entity’s insolvency.
• Simplified wind-up procedures for microenterprises unable to pay their debt as they mature, with Member states required to cover the proceedings cost if the debtor cannot.
• The introduction of the right to establish a creditors’ committee during insolvency proceedings.

For further information please contact Sam Koslover ([email protected])