In brief

All 27 EU member states must implement the European Restructuring Directive of 20 June 2019 by 17 July 2021. The Directive was in part a reaction to the phenomenon observed with continental European companies in a financial crisis to restructure their debt under an English Scheme of Arrangement. The Scheme of Arrangement, which is not an insolvency process, offers the possibility to implement a debt restructuring on the basis of a majority decision by the creditors. Under these rules, a single “hold-out” creditor is unable to block a reasonable restructuring plan if the majority of creditors approves it.

Many European countries did not offer such a valuable possibility outside of an insolvency. In many cases, insolvencies are value-destructive and lower the prospects of recovery for creditors (especially in cases where nothing more than a debt restructuring is required to prevent the insolvency). For that reason, the Directive made it mandatory for EU member states to offer a “preventive restructuring framework” for companies in a financially distressed situation.

In this newsletter, we provide you with a snapshot on the status of implementation of the EU Restructuring Directive in key European jurisdictions, as well as an overview of the new English Scheme of Arrangement.  

Click here to access the full alert.


Partner, Frankfurt
Email: Joachim Ponseck


Counsel, Frankfurt
Email: Artur Swierczok