Delays in implementing insolvency harmonisation
Insolvency Bitesize - November 2017
In November 2016, the Commission put forward a draft directive aimed at ensuring Member States have a minimum restructuring framework. You can read our thoughts on the draft directive here.
In October this year, the European Parliament's Committee on Legal Affairs (JURI) published its draft report on those proposals. It suggests amending the original proposals to include a majority in number test, as well as value, for plan voting (like UK schemes) and to reduce the proposed moratorium to 2 months, with a maximum extension to 6 months (down from 4 and 12 respectively). There is further description of what an “early warning tool” might be and an apparent emphasis on employee protection. But, overall, there are few significant changes to the Commission’s approach.
The latest report was in fact originally due to be published in July. We understand that the final report – which will be the negotiating position of the European Parliament – will not be adopted until February/March 2018. We also understand that negotiations in the Council are advancing slowly and a General Approach may not be reached before Q2 2018.
Given these delays, adoption of the directive may not be until Q1 2019 meaning implementation may only be from Q1 2021, if not after. It's unclear still what this means for the UK's approach given Brexit.
The tentative timetable is:
- early November: deadline to table amendments on draft report in JURI
- late November: consideration of amendments in JURI
- end January 2018: adoption of the draft report in JURI
- February/March 2018: adoption of final report in plenary
- Q2 2018: Council to reach a General Approach
- Q2 2018: trilogue negotiations between the Commission, European Parliament and the Council to start
- Q1 2019: directive to be adopted
- Q1 2021: date for implementation