The Ministers of Justice of the EU Member States in the Council of the European Union on 11 October adopted a position on the directive on corporate bankruptcy. The directive gives a lot of leeway in the application of national laws, but imposes a few common conditions: there will be a model restructuring plan for companies, the liability of managers for bankruptcy will be increased and the duration of protection from enforcement will be limited to a maximum of four months.
EU justice ministers in early October dealt with a directive on corporate insolvency to help restructure reputable companies that go bankrupt due to temporary problems.
The European Commission presented the draft changes back in 2016.
In a common position, ministers within the Council of the European Union agreed that national rules should have decisive force and that common regulations should only cover a few elements of proceedings. These are primarily:
- the possibility of stopping enforcement at the stage of pre-insolvency informal and formal proceedings (proceedings for approval of an arrangement);
- the need to adopt a single instrument in the form of a restructuring plan, which will cover both the restructuring plan and the arrangement;
- making available a model restructuring plan, especially for small and medium-sized entrepreneurs;
- the possibility of including material creditors and shareholders (economic owners of the company) in the arrangement;
- extending the responsibility of business executives;
- creating an application for restructuring advisors.
The period is to be limited protection against executions bailiffs and it will be up to 4 months – except for complicated, exceptional situations.
8 November 2018:
" Changes to insolvency law - EU Council Directive
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