Vol 18 (2021) - Issue 4

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Restructuring Directive and Directors’ Duties in Group Insolvencies

Synopsis
The European Restructuring Directive seeks to harmonise directors' duties with the goal of promoting early responses to financial distress, rescuing viable enterprises and preventing opportunistic behaviour.
However, considering the persistent differences in substantive rules and traditions of EU countries, general and imprecise wording of the Restructuring Directive and its insufficient attention to insolvency of enterprise groups, additional steps may need to be taken to achieve this important goal. This article follows the European discussion about the recognition of a group interest in company and insolvency law, examines the recent work of UNCITRAL in this area, describes the divergent approaches of EU Member States to directors' duties and a group interest, and suggests principles to facilitate predictability and certainty in decision-making at a group and entity level in the (pre-)insolvency context.