Transposing the preventive restructuring directive 2019 into French insolvency law: Rethinking the role of the judge and rebalancing creditors' rights

Abstract

In June 2019, the European Union adopted the Directive on Preventive Restructuring Frameworks. The objective of the Directive is to introduce a level-playing field across all Member States in the area of pre-insolvency restructuring. Member States have until 2021 to transpose the Directive into their domestic insolvency regimes. In April 2019, the French legislator adopted the “Pacte Law”, whose aim is, inter alia, the transposition of the European Directive on Preventive Restructuring. Although five preventive restructuring tools already exist in the French regime, the transposition of the Directive will have an impact on current restructuring practices as it will require: (i) rebalancing the involvement and role of judicial authorities in preventive restructuring proceedings; and (ii) rebalancing the involvement of, and protection granted to, creditors.