Clifford Chance

Makeover for European Insolvency Regulation: because it's worth it?

17 January 2013

A proposal to update the EU Insolvency Regulation was announced in December with the intention of making it easier for viable businesses in financial difficulties to restructure. It is hoped that the proposal will stem the current loss of 1.7 million jobs and 200,000 firms which are going bust each year in the EU. A quarter of these businesses have a cross-border element. With those statistics in mind, we welcome the proposal which is aimed at giving distressed businesses an opportunity to restructure and given effect across Europe. Whether the proposed amendments will make a difference in practice, or whether they amount to no more than a superficial gloss, remains to be seen. For secured creditors, the status quo and safeguards contained in the current Regulation remain unaltered by the proposal.

Download PDF