Insolvency proceedings ensure the orderly winding up or restructuring of companies or entrepreneurs that are in financial and economic distress. In the context of financial investments, those proceedings, including the relevant safeguards for accurately assessing the value of those companies’ and entrepreneurs’ assets, are key, as they determine the final recovery value of such investments. The wide differences among substantive insolvency laws, acknowledged by Regulation (EU) 2015/848 of the European Parliament and of the Council, have contributed to increasing legal uncertainty and unpredictability about the outcome of insolvency proceedings. Large divergences in recovery value and in the time required to complete insolvency proceedings across the Union have negative repercussions on cost predictability for creditors and investors in cross-border situations in the internal market. This divergence among the rules of Member States reduces the attractiveness of cross-border investments, thus creating barriers and impacting the cross-border movement of capital within the Union and to and from third countries. Consequently, the harmonisation of certain aspects of insolvency law could require changes to be made to the laws of some Member States.
Text as published in the Official Journal, reproduced verbatim (including any typographical quirks of the source). For the authentic version, see EUR-Lex.
