On 22 November 2016, the European Commission published a proposal for a new directive on preventive Restructuring, Insolvency and Second Chance, that adopts the European Insolvency Regulation which will be applied from June 2017 giving a binding effect to the principles applying in the key areas already identified in the 2012 Communication and the 2014 Recommendation on Insolvency. The main targets of the proposal are attracting investors, preserving and creating jobs and helping viable companies to survive the economic crises on the grounds of a reduction of differences between national laws and an improvement of the ‘rescue culture’ in the EU.
The new elements of the current proposal by the European Commission are grouped into three basic pillars:
- Strengthening of national preventive Restructuring frameworks: Provision of a toolbox of EU minimum standards of restructuring options for viable enterprises before they become insolvent.
- Strengthening of national frameworks regarding the Second Chance policy: Minimum standards for bankrupt entrepreneurs to access discharge.
- Improvement of the efficiency of national frameworks regarding Restructuring, Insolvency and Second Chance: Introduction of early warning tools, minimum standards to reduce the costs and length of procedures, training and specialization of authorities, use of electronic means of communication.
The legislative process is now launched and will be negotiated between the European Commission and the Council and the European Parliament.
The II International Restructuring and Insolvency Meeting in Madrid held on the 11th of May in the prestigious Ritz Hotel will be a unique opportunity for discussion and debate on the new European Insolvency Regulation.