On 16 July 2019 the Directive on insolvency, restructuring and second chance (the Directive) came into force. The Directive had a long tail and can be traced back to a Commission Recommendation issued in 2014.

Member States will have two years to implement the Directive - they must do so by 17 July 2021. Those Member States that encounter particular difficulties in implementation may benefit from an additional year (so to July 2022).

The impact of the Directive will much depend on how Member States implement the new restructuring regime. In the UK and the Netherlands, domestic legislative insolvency reform is already taking into account many of the changes required by the Directive. The Directive includes a large number of options for Member States. All will therefore depend on how each Member State will adopt the provisions in the Directive. If fully embraced by Member States, the Directive will move Europe closer to the US Chapter 11 model and some European Union Member States may prove to become new restructuring hubs. 

For more detail on the content of the Directive and a breakdown of how it will affect Member States please click here for our full briefing.