On 18 September 2025, the Chancellor of the High Court, the Rt. Hon. Sir Julian Flaux announced the long-awaited publication of the updated Practice Statement in relation to schemes of arrangement and restructuring plans (the "New Practice Statement"). Revision of the existing Practice Statement was, in large part, driven by the rise in contested schemes and restructuring plans which, in turn, has put significant pressure on the Court system.

On 12 June 2025, the Council of the EU announced that member states have agreed on a general approach to a directive aimed at bringing national insolvency standards closer together. This draft directive is designed to make the EU more attractive to foreign and cross-border investors by reducing the legal uncertainties and complexities associated with differing national insolvency laws.

On 13 December 2024, EU member states agreed on a ‘partial’ general approach to the harmonisation of insolvency law.

As the festive season approaches, it is time to take stock of the three 2023 most important decisions of the German Federal Court of Justice (Bundesgerichtshof, BGH) on claw-back issues in insolvency.

The English High Court has sanctioned a restructuring plan in respect of EUR 3.2 billion of bonds issued by the German real estate business, Adler Group. The main objective of the plan was to avoid Adler's imminent insolvency by facilitating access to EUR 937.5 million of new money funding and thereby providing a stable platform from which Adler Group can pursue a solvent wind-down by asset sales over time in recovered market conditions. This represents a novel use of the restructuring plan procedure, which has previously been seen exclusively as a corporate 'rescue' tool.

On 7 December 2022, the European Commission published itsproposal for a directive of the European Parliament and of the Council harmonising certain aspects of insolvency law (COM(2022) 702; 2022/0408 (COD)) (the Proposal). Readers may be aware that the EU has already legislated in the area of insolvency.

Pre-packaged administration sales (where a sale of key assets is agreed prior to the appointment of administrators and then implemented by the administrators immediately following their appointment), have been a widely-used and highly successful tool to rescue businesses, or parts of businesses, that may otherwise have languished in administration interminably.

The economic impact of the COVID-19 pandemic led to a wave of creditor schemes of arrangement ("schemes") and restructuring plans ("RPs") in the second half of 2020, which shows no sign of abating in 2021. For the uninitiated, the scheme (a long-established tool) and the newer RP process are court led UK restructuring options that a company can use to bind a minority of creditors into a restructuring. An RP can also be used to "cram down" an entire dissenting creditor class into a deal where certain conditions are met.

HEADLINES

• In March 2020, credit insurer Euler Hermes forecast a 43% increase in insolvencies in the UK in 2021, as well as a 26% uptick in France and 12% in Germany
• By December 2020, ratings agency S&P was forecasting European defaults rising to as much as 8% by the end of 2021

There have been fewer European insolvencies and restructurings than anticipated during the COVID-19 pandemic, but distressed deal activity may accelerate as soon as economies are finally able to reopen.

High yield bond and leveraged loan issuance for restructurings across the United States and Western and Southern Europe has climbed 65% year-on-year, up from US$29.1 billion for the first nine months of 2019 to US$48 billion over the same period this year.