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04 June 2019 / news

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. 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. How does Luxembourg stand on these different aspects of the restructuring proceedings?

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.



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