During the current decade, restructuring plans have emerged as a widely used instrument for companies that are likely to become insolvent but can demonstrate their business remains viable. Within the EU, Article 8 of the Preventive Restructuring Directive (PRD 2019/1023) outlines the essential elements that restructuring plans must contain when submitted for adoption by groups of affected creditors or for court confirmation. These requirements are intended to ensure clarity, transparency and effectiveness in the restructuring process.
A restructuring plan must more specifically include, among other things, the following (the letters correspond to those included in Article 8):
- The identity of the debtor who acts as a debtor-in-possession (DIP).
- Information on the debtor’s assets and liabilities at the time of submission of the restructuring plan, and a description of the economic situation of the debtor, the position of the workers, and a description of the causes and extent of the difficulties of the debtor. This rule presumes, given the contractual nature of the restructuring plan, that disclosures should be made rather early in the negotiation process. Without (sufficient and adequate) information, it is impossible for a party to be sufficiently informed to make a decision.
- Information on the affected parties and their claims or interests covered by the restructuring plan, as well as:
- where applicable, the classes into which the affected parties have been grouped for the purpose of adopting the restructuring plan, and the respective values of claims and interests in each class.
- Where applicable, details of the parties (individually or described by categories of debt) who are not affected by the restructuring plan, together with a description of the reasons why it is proposed not to affect them.
- Where applicable, the identity of the practitioner in the field of restructuring (PIFOR).
- The terms of the restructuring plan, including in particular six terms (Article 8(1)(g)(i) to (vi)) related to any proposed restructuring measures, the proposed duration of the restructuring measures and the overall consequences as regards employment, such as dismissals, short-term working arrangements or similar, estimated “financial flows” of the debtor (if provided for by national law) and any new financing anticipated as part of the restructuring plan, including the reasons why the new finance is necessary to implement the restructuring plan. The Directive is silent on the topic of the release of third-party guarantees in restructuring plans but it does not prevent member states providing for such a regime; and finally:
- A statement of reasons why the restructuring plan has a reasonable prospect of preventing the insolvency of the debtor and ensuring the viability of the business, including the necessity to implement the restructuring plan. Member states may require statement of reasons to be made or validated either by an external expert or by the PIFOR if such a practitioner is appointed.
At the start of and during the negotiations between the debtor and all its affected parties, the former has the duty to disclose all relevant business information. The PRD 2019/1023 does not explicitly specify the scope of such disclosure or whether certain confidential information may be excluded from it. It is important to underline that the final restructuring plan is a contract where the counter-parties may expect that the debtor complies with its duty of utmost good faith. The counter-parties (mostly the affected creditors), after all, rely heavily on the honesty and disclosure of the debtor. The duty of full disclosure means that it will be possible that the debtor, given the specific nature of the restructuring plan offered, should provide more or additional information than giving quite literal effect to the information described in Article 8(1). The provision sets a minimum standard.
While the minimum standards for the content of a restructuring plan are listed in the PRD 2019/1023, member states retain the flexibility to require additional information. Member states may opt for the requirement that more information is needed than the ‘minimum standards’ (see recital 42) as foreseen in Article 8(1), specifically ‘… additional explanations in the restructuring plan, concerning for example the criteria according to which creditors have been grouped, which may be relevant in cases where a debt is only partially secured.’ Expert opinions on asset valuation are not mandated under the PRD 2019/1023 (recital 42).
In practice there is, in my view, not much assistance, apart from (non-public) internal databases of restructuring plans (and clauses) available in any individual firm. Drafting suggestions can be found in a welcome 2018 Best practices in European restructuring (“Contractualised distress resolution in the shadow of the law”). At this place, I cite as best practice guideline number 3.4 (Content of the plan):
‘The plan and the explanatory documents should include all necessary information, accompanied by relevant documents, for stakeholders to assess and decide whether or not to support the plan. At a minimum, the plan should address (1) the context of the restructuring; (2) the consequences of the failure to implement the restructuring; (3) an overview of existing indebtedness; (4) the timeline of the plan; (5) financial projections and a feasibility analysis; (6) the valuation and allocation of the value amongst claimants; (7) legal pre-conditions for restructuring; (8) actions to be taken by affected stakeholders; (9) objections to the proposed plan arisen in negotiations; (10) provisions to address contingencies; (11) the treatment of intercompany claims; (12) a discussion on the position of directors and senior management and of the corporate governance of the debtor entity; (13) tax issues; (14) professional costs associated with plan formulation and approval; (15) jurisdiction.”
It is striking Article 8 PRD 2019/1023 devotes a word to the law applicable to the restructuring plan. This lacuna, I will address in a forthcoming book.
However, there is an exception. Article 8(2) of the PRD 2019/1023, states that member states are obligated to provide a comprehensive online checklist, tailored to the needs of small and medium-sized enterprises (SMEs). By its very nature, an EU Directive is full of substantive and procedural rules that the EU believes member states ought to implement. A rule that imposes an obligation on the member states themselves—in this case, to make “checklists” available online—is quite exceptional. The regulations are clear: The check-list shall include practical guidelines on how the restructuring plan has to be drafted under national law. The check-list shall be made available in the official language or languages of the member state. And member states shall consider making the check-list available in at least one other language, in particular in a language used in international business.
The reason for this all follows from recital 17 of the PRD 2019/1023, signalling, that enterprises and in particular SMEs (which represent 99 % of all businesses in the Union) should benefit from “a more coherent approach” at Union level. The recital continues, by providing: “SMEs are more likely to be liquidated than restructured, since they have to bear costs that are disproportionately higher than those faced by larger enterprises. SMEs, especially when facing financial difficulties, often do not have the necessary resources to cope with high restructuring costs and to take advantage of the more efficient restructuring procedures available only in some member states. To help such debtors restructure at low cost, comprehensive checklists for restructuring plans, adapted to the needs and specificities of SMEs, should be developed at national level and made available online …”.
At my request, AI (the open ChatGPT version) checked the text of Article 8(2) in relation to the national implementation materials, and—where available—government websites. To shortly summarise, it found evidence that five member states have used an Article 8(2)-type checklist: Belgium, Germany, Italy, Lithuania and Malta. There is, according to this source, clear evidence of compliance in at least these five member states.
It indicates too that there are important borderline cases. Five member states do not provide sufficiently authoritative evidence, only provide a “non-official checklist” or are still in the process of creating a comprehensive online tool/checklist.
Of course, not every member state needs to strive to be the star pupil. But given that SMEs form the backbone of the EU’s economy and the policy chosen, there is a recognised need to give them a significant boost. The results achieved by member states more than five years after the obligation came into effect are decidedly meagre.
References
Best practices in European restructuring. Contractualised distress resolution in the shadow of the law, Stanghellini, Mokal, Paulus, Tirado (eds.) (2018), see https://www.codire.eu/publications/
This is a slightly adapted version of a regular column Bob Wessels is writing for Global Restructuring Review (GRR) on the topic of cross-border restructuring and insolvency in a European context. GRR is a subscription-only publication and the column appeared in GRR on September 14, 2026. See www.globalrestructuringreview.com.