The restructuring of the debtor as a means bankruptcy warnings under european law legislation

Abstract

Directive on preventive restructuring 1023/2019 (hereinafter referred to as the Directive) guarantees the right of bona fide and prospective commercial entities (hereinafter‑debtors) to initiate a preventive restructuring procedure in the absence of signs of bankruptcy, subject to the mandatory consent of the debtor and the majority of creditors, while, if the disagreement of the majority of creditors is not economically justified, the procedure can be approved by the authorized body (hereinafter — the court). The purpose of the procedure is to prevent bankruptcy in advance. A significant common characteristic of preventive restructuring and bankruptcy proceedings is the collective extension of legal consequences to all creditors, including those who disagree, because a single legal will is economically necessary to achieve the goal. In addition, it prohibits any of the creditors, including those from the dissenting minority, from starting enforcement proceedings (bankruptcy proceedings or enforcement proceedings) at a certain period, even if there are grounds provided for by law, since the legal consequences apply to all creditors, which ensures the incentive and effectiveness of the measures taken and avoids a conflict of creditors due to different assessments of the economic situation and prospects of the debtor.