The directive aims at providing access by viable enterprises in financial difficulties to preventive restructuring frameworks to enable them to restructure at an early stage, and so prevent insolvency.
It also gives reputable bankrupt entrepreneurs a second chance, and introduces measures to increase the efficiency of restructuring, insolvency and discharge procedures.
Negotiations with the European Parliament can now start with a view to reaching an agreement in early 2019.
Main elements of the Council's position
The position of the Council keeps all the main elements of the initial Commission's proposal but provides more flexibility to member states to adapt the new legislation to their existing frameworks.
In particular, the Council has amended the provisions on:
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the involvement of judges: while keeping the objective of having quicker insolvency procedures, the Council's position provides for more flexibility for member states to decide on when and where the involvement of judges is made mandatory;
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the duration of the stay of individual enforcement actions: while keeping the durations proposed by the Commission (i.e. 4 months maximum for the initial duration), the Council introduces the possibility of a longer period for courts to confirm particularly complex plans;
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the cross-class cram-down: while the rules defined in the proposal are kept, member states have decided on more flexibility at national level to set the conditions needed to carry out a prior valuation of a business, as well as the rules determining when a creditor class can be crammed down.
Council - general approach on the directive on business insolvency, restructuring and second chance
© European Council
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