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From ‘Liquidators’ to ‘Practitioners in the Field of Restructuring’: Sea Change or Cosmetic Maquillage?

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IPThe Proposal for a Directive on Preventive Restructuring Frameworks (November 2016) introduced a new figure in the insolvency and restructuring arena: the practitioner in the field of restructuring or PIFOR.

This note highlights the key similarities and differences between these professionals and (i) the ‘insolvency practitioners’ as defined by the 2015 EU Regulation on Cross-Border Insolvency Proceedings (recast) and (ii) the ‘liquidators’ as defined by the 2000 version of that regulation.

This note assumes that the key objective of the proposed directive is to achieve greater substantive harmonization of substantive insolvency practices and laws between the Member States. It therefore tests whether this assumption is valid with reference to the newly introduced notion of PIFOR.

It concludes, however, that the proposal fall short of the mark, since the new definition of PIFOR is unlikely to be interpreted in the same way across all the Member States.

In addition to that, this note highlights other issues associated with the proposed notion of PIFOR: (i) the uncertainty associated with the definition and its scope, and (ii) the possible relaxation of professional and ethical standards as a result of the competition between IPs and PIFORs.

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EU: Bye Bye ‘Liquidation Culture’?

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On Tuesday 22 November 2016, the European Commission ‘Insolvency Initiative’ – part of the Capital Markets Union Action Plan and the Single Market Strategy – finally produced a tangible and remarkable result: a proposal for a restructuring directive, and the harmonization of substantive insolvency practices among European Member States. Continue reading