Pre-pack Sales: Is Portugal Ready For The New Framework Under Directive 2026/799?

A business can be worth millions on Monday and considerably less by Friday, not because its products have changed, but because insolvency has become public knowledge. The European Union has now taken an important step to address this problem.

Directive (EU) 2026/799, published on 01 April 2026, introduces pre-pack proceedings, allowing for the sale of a distressed business to be prepared before insolvency proceedings formally begin and completed immediately afterwards. The directive requires EU member states to transpose its provisions into national law by 22 January 2029.

The aim is simple: preserve the business as a going concern, maximise returns for creditors, and, where possible, protect jobs.

Unlike several European jurisdictions, Portugal does not currently recognise pre-pack proceedings as an autonomous legal mechanism. Today, Portuguese law allows the sale of a business during insolvency proceedings, but not the confidential preparation of that sale beforehand. In other words, while the destination may already exist, the new directive requires Portugal to build an entirely new road to get there.

The new directive establishes a structured model built around two distinct phases: the preparation phase, before the insolvency declaration; and the liquidation phase, after the insolvency is declared.

During the preparation phase, an independent monitor assists in identifying potential purchasers, supervises the preparation of the sale, assesses the offers received, and recommends the best offer, in accordance with the selection criteria established by the member states.

Once insolvency proceedings are formally opened, the liquidation phase allows the sale to be approved and executed swiftly, avoiding the loss of value that often accompanies lengthy insolvency proceedings. At the same time, it seeks to prevent “backroom deals” by requiring the process to be competitive, transparent, and fair, with judicial or creditor oversight where appropriate.

For Portugal, the challenge is not simply to copy the directive into the Insolvency Code. It will require answers to practical questions: Who appoints the monitor? How is confidentiality reconciled with judicial supervision? When can a court refuse the proposed sale? How should creditors participate?

The coming years will therefore be about much more than transposition. They will determine whether Portuguese insolvency law can embrace a system designed to save value before it disappears, rather than merely distribute what is left afterwards. How Portugal will transpose these new rules remains to be seen. After all, the best insolvency sale may well be the one negotiated before anyone dares to use the word “insolvency”.