Debtors and investors have an enhanced choice of restructuring venues as the EU Restructuring Directive is rolled out in Member States

A number of key European jurisdictions have now implemented the EU Preventive Restructuring Directive, the broad thrust of which is to introduce harmonised out-of-court restructuring procedures across Member States to address financial difficulties at an early stage of distress. These measures include the introduction of cross-class cramdown (including of shareholders) and a moratorium to provide a debtor with breathing space to propose a restructuring. Germany (StaRUG) and the Netherlands (WHOA) were first movers, with each procedure coming into force in early 2021. The French revised conciliation and accelerated safeguard process became law in October 2021. Italy and Spain are expected to implement and/or consolidate their equivalent procedures to meet the extended deadline of July 2022, but other Member States may need further extensions. Although no longer bound to do so, the UK enacted its own cross-class cramdown and standalone moratorium tools in 2020. Therefore, there are now genuine choices for debtors, and a healthy competition is emerging between the different regimes.