In the current market, investors are increasingly considering their options in relation to the stressed and distressed credits in their portfolios. Whilst mindful of stakeholder relationships, secured lenders may, in some circumstances, wish to consider the "nuclear option": enforcing their share pledge over a holding company of the operating group (ideally, such pledge being over a single company which directly or indirectly holds the entire business - a "single point of enforcement").

On 1st November 2023, the new Luxembourg law of 7 August 2023 on the continuation of businesses and modernisation of insolvency law (the "Law") enters into force.

This long-awaited reform implements Directive 2019/1023 to introduce a modern restructuring regime, with out-of-court and court supervised mechanisms to protect companies in distress. The Law is expected to provide more flexible and effective measures for businesses under financial stress and their creditors, making Luxembourg an attractive jurisdiction for restructurings.

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.

The banking reform package marks an important step toward the completion of the European post-crisis regulatory reforms