EACTP debates proposed European Business Insolvency Directive
The European Association of Certified Turnaround Professionals (EACTP) held an evening of debate in May about the proposed European rules on business insolvency.
The event, ‘A New European Restructuring Regime in a Changing World’, was held in Brussels at the offices of Squire Patton Boggs.
The core topic was the European Commission Directive, which was published in draft form in November 2016 and which promises to transform the regulatory landscape for turnaround professionals.
Proposals to be adopted ‘by 2018’
Salla Saastamoinen, the European Commission Director of the Civil and Commercial Justice Unit, spoke about the Draft Directive and listened to the views of restructuring professionals from Finland, Germany, UK, Belgium and Austria.
Saastamoinen explained that the negotiations of the draft Directive in the Council are now on a chapter-by-chapter examination.
The current holder of the EU Presidency, Malta is unlikely to reach an agreement on the proposal despite the Member States’ broad support of the proposal.
The Estonian Presidency taking over the Council leadership in July 2017 will continue the negotiations. From the European Parliament side, the discussions are still at a very early stage with their position expected to be finalised by the end of the year.
Taking into consideration the EU’s legislative process, the proposal is likely to be adopted by 2018.
This would give an additional two years for Member States to transpose the proposal into national legislation, which will mean that by 2020 a new restructuring regime would be functional across the EU.
This means that the Directive will not be implemented until after Brexit, when the UK leaves the EU In 2019, and will only apply to EU27.
It is not yet known whether, and if so how, EU legislation will continue to apply to the UK after Brexit.
The UK has its own proposals
There was also a panel debate about the Draft Directive chaired by EACTP President Jukka-Pekka Joensuu and featuring Andreas Lehmann, a partner from Squire Patton Boggs in Germany and Chris Laughton, a partner with London-based accountants Mercer and Hole.
Laughton explained that the UK Government has already reviewed the Corporate Insolvency Framework in England and Wales in 2016.
Following the review, it announced its intention to introduce legislation for a moratorium and restructuring plan to bind secured creditors for a short period to enable companies facing short term difficulties to attempt a financial restructuring.
Publication of detailed proposals has been delayed by the UK triggering Article 50 to start the Brexit process, followed by calling a UK General Election.
It is not yet known when legislation might be passed for a UK Restructuring Plan but there is broad support for the Government’s proposals amongst the Restructuring professionals.
A few of the highlights from the discussion;
You can see the draft EU Business Insolvency Directive, at:
For a summary of the draft Directive, go to:
For details of the UK proposals go to:
To find out more about EACTP go to: www.eactp.eu