Green light to the directive set to harmonize and strengthen restructurings in the EU
On June 6 the Council of the European Union approved the Proposal for a Directive of the European Parliament and of the Council on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures.
This marks an end to the legislative process of the Directive, which is now pending to be publisged in the Official Journal of the European Union.
Put concisely, the approved directive imposes an obligation on member states to implement harmonized legislation on:
- Preventive restructuring frameworks available for debtors in financial difficulty;
- Procedures aimed at discharging the debts of insolvent entrepreneurs to give them a “second chance” in business; and
- Measures to increase the efficiency of restructuring, insolvency and discharge procedures.
The member states have two years (with the possibility of a 1-year extension), from the entry into force of the Directive (that is, 20 days after its publication in the Official Journal), in which to transpose it in their national laws.