What is the direction of travel of European pre-insolvency reforms?
12 December 2019
Associates Musonda Mutati and Harini Viswanathan have authored an article for Butterworths Journal of International Banking and Financial Law, highlighting the differences between the European and proposed UK reforms.
Key takeaways are:
- Although the UK pre-insolvency reforms aim to achieve broadly the same outcomes as the proposed European pre-insolvency reforms, there are some key points of divergence.
- The proposed UK restructuring plan incorporates the absolute priority rule but allows deviation from it which could offer a comparative advantage to debtors in the UK when compared with jurisdictions such as Germany or Spain.
- Participants may prefer some of the features of the European Restructuring Directive which the UK may not choose to adopt such as debtor in possession financing.