Selected restructuring issues in continental Europe - an illustration with Luxembourg

Many continental European jurisdictions do not have the statutory framework to deal with global group restructurings, either because their in-court insolvency proceedings lack flexibility or practicability, they do not have the relevant framework to incentivise out-of-court restructurings (including, for instance, provisions regarding standstill, restructuring plan recognition and creditor classes, creditor appointed administrators, etc.), or because they do not recognise the concept of a corporate group or conglomerate but instead focus on group entities being treated individually and separately, also in a distressed context. As a result, many European restructurings have to address, at some point in time (i) the group concept or-lack thereof and how it influences restructuring negotiations; (ii) the lack of efficient in-court restructuring options for corporate groups; and (iii) the local recognition of foreign in-court restructuring proceedings.

In this article, Anne-Marie Nicolas and Alvaro Garrido Mesa will explain the Luxembourg statutory framework to deal with global group restructurings.

Group Concept or lack thereof

• Lack of efficient in-court restructuring options for global corporates
• Bankruptcy as the only in-court option in Luxembourg
• Creditor’s struggles to control or influence the proceedings

The local recognition of foreign in-court restructuring proceedings

• EU proceedings
• Foreign (non-EU) insolvency proceedings

You can read the full article here.