Luxembourg restructuring and modernisation of insolvency law reform

The Luxembourg Parliament adopted the long-awaited draft bill 6539A on the preservation of businesses and modernising bankruptcy law on 19 July 2023 (the “Law”). This bill substantially amends the Luxembourg insolvency landscape.

Its aim is to modernise the existing framework in order to give businesses the opportunity to overcome financial difficulties without running into bankruptcy. This bill also finally implements Directive EU 2019/1023 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, whose transposition was due in July 2021.

"Luxembourg has eventually voted this long-awaited reform. Now, Luxembourg has dedicated debtor-in-possession proceedings. Will this be more attractive than the repealed legislation? Will this create a hub for international restructurings? This remains to be seen."

Melinda Perera
Capital Markets and Banking Partner