European Union: Financial Restructuring

CEOs and their executive teams face a critical misalignment in assessing market pressures, creating governance challenges that demand a fundamental rethinking of portfolio management. This article examines why the traditional sequential approach to evaluating underperforming business units destroys value and presents a concurrent decision framework that treats fix, sell, and close options as simultaneous strategic choices rather than a process of elimination.

The European Union has formally adopted a directive establishing minimum standards for insolvency law harmonization across Member States, covering avoidance actions, asset tracing, pre-pack proceedings, director filing duties, creditors' committees, and transparency measures. While the directive sets baseline requirements in these critical areas, its practical impact on German insolvency law is expected to be limited, as Germany's existing framework already meets or exceeds most of the directive's standards

The acquisition of assets or business operations out of insolvency proceedings presents distinct legal challenges under German law, particularly regarding the automatic transfer of employment relationships. The "acquirer concept" (Erwerberkonzept) offers a legally reliable solution that enables workforce restructuring while avoiding prohibited terminations based solely on the transfer of operations.

The EU Insolvency Harmonisation Directive introduces sweeping changes to insolvency frameworks across Member States, establishing minimum standards in five critical areas including directors' duties to file, avoidance actions, and pre-pack procedures.

When a contractor faces financial distress, companies often make direct payments to the contractor's upstream suppliers to maintain supply chain continuity.

A key new directive harmonising certain aspects of insolvency law was published in the Official Journal of the European Union on 1 April 2026.

Under French law, companies are protected by several procedures to overcome financial difficulties. This legal protection aims to help companies facing financial difficulties and protect the overall business economy from the risks of cascading bankruptcies.

The out‑of‑court mechanism emerges as an important tool for businesses, especially in cases of debts to the State and to e‑EFKA.

The out‑of‑court settlement mechanism is a debt restructuring tool that, from its introduction in 2021 until today, has undergone successive amendments, particularly aimed at improving settlement terms for debtors...