The European Council announced that the Danish presidency of the Council and European Parliament negotiators have reached a provisional agreement on an EU directive to harmonise selected elements of insolvency law across member states, with the stated aim of improving creditor recoveries and making cross-border investing easier by reducing differences in national regimes. The compromise sets EU-wide rules covering minimum standards for avoidance actions, and requires member states to designate courts or administrative authorities that, on request from an insolvency practitioner, can access and search national centralised bank account registers and other member states’ bank account registers via the Bank Account Register Interconnection System, subject to conditions and monitoring of access. Insolvency practitioners would also gain access to beneficial ownership registers and certain national registers and databases. It would also introduce a pre-pack proceeding in all member states, enabling a business sale prepared before formal insolvency and allowing automatic transfer of essential executory contracts to the buyer without counterparty consent, alongside safeguards for freedom of contract and without affecting workers’ rights. The directive would align directors’ duty to file for insolvency, requiring filing within three months of becoming aware of financial distress, with an option for member states to suspend the duty where alternative measures provide equivalent creditor protection. Under certain circumstances, creditors’ committees would be required, with harmonised rules on composition, working methods and members’ personal liability, and member states could limit the requirement to large enterprises. Member states would also have to publish an insolvency-law factsheet on the EU e-Justice Portal in English, French and German, as well as the original language. The provisional agreement must be confirmed by both institutions and then formally adopted. Member states would have two years and nine months to transpose the directive into national law.
European Council 2025-11-19
European Council reaches provisional agreement with European Parliament on directive harmonising key aspects of EU insolvency law
The European Council announced a provisional agreement on an EU directive to harmonise insolvency law across member states. It aims to improve creditor recoveries and facilitate cross-border investing by standardising rules on avoidance actions, access to bank account and beneficial ownership registers, and introducing pre-pack proceedings. It also aligns directors' duty to file for insolvency and mandates creditor committees under certain conditions, with member states required to publish insolvency-law factsheets on the EU e-Justice Portal.