The Preventive Restructuring Framework ‒ “Everything Better“ Thanks to Upcoming EU Directive?

Key points, chances and risks, particularly from the perspective of creditors and banks

Under Austria’s EU Presidency, a press release on 19 December 2018 presented interesting news about what the restructuring market can expect in the coming year: In Brussels, agreement was reached on a new EU Directive introducing Europe-wide minimum standards on preventive restructuring frameworks. The Directive, which stipulates a two-year transposition period, is expected to be adopted before the EU Parliamentary elections in May 2019.

Through EU-wide access to early-warning tools, the Directive aims to further promote a culture that encourages early preventive restructuring in all Member States, maintain values and jobs, and further decrease NPL ratios. The objective of the Directive is to create a balance between the legitimate interests of debtors and those of creditors.

Will everything really be better as a result or will the new rules bring risks as well as chances? What is the significance for the parties concerned ‒ especially for banks and other creditors? Is there a possibility of abuse by black sheep? Do creditors have to fear disadvantages? Will there be judicial control or the possibility of appointing administrators? Is the Directive in line with Austrian law and what would its implementation in Austria look like?

We look forward to discussing these and other questions with you at the next event in our “early bird” series.