Abstract

The EU has taken steps towards harmonisation of restructuring practices among member states to, inter alia, contribute to the proper functioning of the internal market. Against this backdrop, the EU Directive on Preventive Restructuring Frameworks came into force in 2019 to provide a minimum harmonisation concerning the protection of viable enterprises, that are likely to become insolvent, from entering into a formal insolvency procedure. A notable aspect of the Directive is that national legislators have the discretion to opt between the implementation of the Absolute Priority Rule (APR) and a newly introduced rule, the so-called EU Relative Priority Rule (RPR). The priority rules are default distributional rules that are meant to provide the framework within which the parties negotiate the allocation of value. The priority, therefore, “lives dual life”, meaning that apart from its relevance to the distribution of property, it also has procedural effects. In light of this, there are ongoing discussions as to the ex-ante and ex-post implications of the application of the APR and the RPR on the position of parties involved in reorganisation procedures and, hence, the choice of member states between these two priority rules.

In this ACLE Seminar, Prof. Stanghellini is going to provide an overview of the European harmonisation on restructuring practices, with a focus on the debate on the APR v the RPR and the implications of the priority rules on the position of stakeholders, in particular, on unsecured creditors. 

Paper

The paper can be found here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3271790.

Practicalities

This event will be a hybrid event. For online attendance, the Zoom link will be specified in the registration confirmation email. In-person places will be limited, cannot be guaranteed and will be allocated on a first-come-first-served basis. Room information will be indicated by email upon registration.

About the speaker

Prof. Lorenzo Stanghellini is a Full Professor of Business Law at the Faculty of Law of the University of Florence. He has earned an LL.M. from Columbia University (USA) in 1995. He has been a visiting researcher in various universities in England (Cambridge, Oxford) and in the United States (Columbia, UC Berkley, Stanford).  Lorenzo acted as principal investigator of the European research project “Contractualised Distress Resolution in the Shadow of the Law”, which the University of Florence coordinated between 2016 and 2018. Lorenzo has provided assistance in several legislative reforms both at national and European level. Recently, he has served as a member of the Group of Experts in charge of assisting the European Commission in the preparation of a directive harmonizing restructuring and insolvency law in the EU, which is expected to be enacted by the end of 2019.

About the ACLE and ACT

This event is jointly organized by the Amsterdam Center for Law and Economics (ACLE) and the Amsterdam Centre for Transformative Private Law (ACT). The ACLE is a joint initiative of UvA Economics and Business and the Faculty of Law at the University of Amsterdam (UvA). The objective of the ACLE is to promote high-quality interdisciplinary research at the intersection between law and economics. ACT’s objective is to explore the role of private law in the making of society, as well as the processes of private law-making in a pluriform world.