Europe has struggled mightily during the last several years to
triage a long series of critical blows to the economies of the 28
countries that comprise the European Union, as well as the
collective viability of eurozone economies. Here we provide a
snapshot of some recent developments regarding insolvency,
restructuring, and related issues in the EU.
The Netherlands—In August 2014, the Dutch legislature
circulated a proposed bill that would introduce to Dutch
restructuring law U.K.-style "schemes of arrangement," a
radical departure from existing procedures. The proposed
bill follows the introduction of a prepackaged insolvency mechanism
in 2013. Acknowledging that the nation lacks a flexible corporate
rescue procedure, the Dutch legislature has proposed legislation
that would make schemes of arrangement patterned on U.K. law
possible for distressed Dutch companies, but under rules that could
make such schemes even faster than their English
counterparts.
Under existing Dutch law, it is nearly impossible to alter the
capital structure of a company without the unanimous approval of
all debt and equity holders. The draft bill introduces rules that
would bind dissenting creditors to a restructuring proposal under
certain circumstances. In addition, under the proposed legislation,
security rights granted to lenders that provide emergency financing
during the period between the introduction of a proposed scheme and
the date the court decides whether to approve the scheme will no
longer be subject to challenge (or annulment) by any trustee who is
thereafter appointed to oversee the company's winding-up. The
public consultation process for the draft bill commenced in August,
and the legislation may be amended before it is implemented.
Implementation is expected to take place on January 1, 2016.
Other recent European developments can be tracked in Jones
Day's EuroResource, available
here.
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