26 June 2019
On 26 June 2019 a new EU Directive on preventive restructuring frameworks on discharge of debt and disqualifications, and measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (the Directive) was published under number 2019/1023. Member States must implement the Directive by 17 July 2021, with possible extensions of up to one year. The Directive looks to ensure that there are minimum restructuring measures available across Europe to enable debtors in financial distress to solve their problems at an early stage and avoid formal insolvency proceedings. The Directive is advertised as promoting mechanisms which will prevent the build-up of non-performing loans and ensure that debtors have access to restructuring tools, leading to a reduction in the risk of those loans becoming problematic. However, the jury is out as to whether the measures will in fact deliver on these laudable aims.