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A new framework for EU insolvency law: Preparing for the Harmonisation Directive
A new framework for EU insolvency law: Preparing for the Harmonisation Directive
9 April 2026
Series
Blogs
9 April 2026
Author: Alexia Kaztaridou
On 1 April 2026, the Directive harmonising certain aspects of insolvency law was published in the Official Journal of the EU, marking the conclusion of a legislative process that began over three years ago. As set out in our earlier article, the Directive’s primary goal is to address the legal uncertainty and commercial costs that arise from the fragmented national insolvency regimes. By establishing common minimum standards, the new framework is designed to make both domestic and cross-border insolvency proceedings more predictable, transparent, and efficient. For creditors and investors, this harmonisation aims to improve recovery rates and ultimately build greater confidence in the single market.
Title II of the Directive harmonises the rules for challenging legal acts perfected before the opening of insolvency proceedings that are detrimental to the general body of creditors, rendering them void, voidable, or unenforceable.
The final text establishes clear minimum “look-back” periods to create a more predictable framework for assessing transaction risk. In principle, these are:
A key change from earlier drafts concerns the standard of knowledge required to challenge certain pre-insolvency transactions. For both preferential payments and acts intentionally detrimental to creditors, the final text requires the counterparty’s actual knowledge of the debtor’s insolvency or intent, respectively. This narrows the test from a broader ought to have known standard, a move designed to provide greater legal certainty for parties transacting with a company in financial distress. In both scenarios, the Directive establishes a rebuttable presumption that a counterparty had the requisite knowledge if they were closely related to the debtor.
To maximise the value of the insolvency estate, the Directive gives insolvency practitioners significantly enhanced tools to identify and trace a debtor’s assets across borders.
A core innovation is the introduction of a framework for access to bank account information. Insolvency practitioners can request that a designated national court or authority in any Member State access and search national bank account registers through a new, centralised platform: the Bank Account Registers Interconnection System (BARIS).
In addition, insolvency practitioners must be given timely and direct access to:
These measures are designed to make cross-border asset discovery and recovery more operationally effective and less reliant on cumbersome, ad-hoc court-to-court assistance.
The Directive introduces a harmonised, two-phase framework for “pre-pack” sales. This was one of the most debated elements of the legislation. The process begins with a confidential “preparation phase” overseen by an independent monitor, followed by a “liquidation phase” where the sale is formally approved and executed after insolvency proceedings are opened.
Key features of the final framework include:
Despite these pursued aims, not all Member States were persuaded. For instance, Spain and the Czech Republic abstained from the final vote, citing concerns that the framework lacked sufficient anti-abuse mechanisms and creditor protections.
The Directive requires Member States to impose a duty on the directors of a company to file for insolvency proceedings no later than three months after they became aware, or could reasonably be expected to have been aware, that the company is insolvent.
This duty can be discharged through other means, such as a public notification of insolvency, or suspended if directors take alternative measures that provide equivalent protection to creditors. Directors who fail to comply with this duty will be held civilly liable for any resulting damage to creditors in accordance with national law. A defence may be available if directors can demonstrate their alternative measures were reasonably likely to produce an equivalent or better outcome.
While these provisions set a clear benchmark, their practical effect may be inconsistent. The Directive explicitly leaves the definition of “insolvency” to national law. This, combined with a lack of guidance on quantifying damages and proving causation, creates a risk of divergent application across Member States.
The Directive introduces harmonised rules for creditors’ committees to ensure creditors can participate effectively in insolvency proceedings. Member States must provide for a committee to be established after insolvency proceedings open if requested by the general meeting of creditors or, where national law does not provide for such a general meeting, if so requested by creditors in accordance with national law. However, Member States may choose not to apply this requirement where the costs and burdens of a committee would outweigh its benefits, and can limit its mandatory application to proceedings concerning large undertakings. The committee’s harmonised functions include representing the collective interests of creditors and being regularly informed of the insolvency practitioner’s activities. The rules also establish a clear liability standard, protecting committee members from personal liability for damages except in cases of intentional misconduct or gross negligence.
For creditors in complex, cross-border cases, this provides a more structured and predictable way to represent their collective interests. However, the provisions were contentious. Belgium, for instance, abstained from the final vote, regretting that the rules did not recognise equivalent national systems, while Spain cited potential inefficiency and high cost.
Following the Directive’s publication in the Official Journal of the European Union, attention turns to national implementation. Member States must transpose its provisions into national law by 22 January 2029. A later deadline of 10 July 2029 is set for implementing the specific provisions that enable cross-border access to bank account information through BARIS. The new avoidance actions regime will only affect legal acts perfected after the national implementing laws enter into force.
Although the final landscape will be shaped by the legislative choices made by each Member State, the fundamental requirements are already established. Creditors and investors are well advised to use the transposition period to familiarise themselves with the new framework and assess the potential impact on their activities.