The Bankruptcy and Diligence (Scotland) Bill was passed by the Scottish Parliament on 6 June 2024 and a date for it coming into force is awaited.

The long-awaited amendment "H" of the Slovenian Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act (the "Act") entered into force on 1 November 2023. The new provisions complete the transposition of Directive 2019/1023,[1] introducing three crucial sets of changes to the Slovenian insolvency and restructuring legislation.

In our practice, we have found that the most common reason for distressed companies to initiate reorganisation measures is a severe liquidity squeeze.

Driven by regulation, banks are increasingly reluctant to grant senior bridge financings, leading companies to resort to trade credits of major suppliers, such as deferrals or generous payment agreements. But these trade creditors are often unaware of significant third-party liability risks.

Shareholders of Austrian limited liability companies ("GmbH") often stipulate the right to purchase the shares of co-shareholders in certain events. These "share purchase rights" (Aufgriffsrechte) entitle the remaining shareholders to acquire the share of a shareholder when a contractually defined event (Aufgriffsfälle), like insolvency or the death of a shareholder, occurs. Often these rights are laid down in articles of association or a separate shareholders' agreement (Syndikatsvertrag). They are generally qualified as option rights.

After a delay of more than a year, an Act on Preventive Restructuring (the "Act") implementing the EU directive on preventive restructuring frameworks finally became effective in the Czech Republic on 23 September 2023. The long-awaited Act introduced a brand-new legal tool enabling viable enterprises in temporary financial distress to achieve restructuring outside insolvency proceedings. It is a voluntary and flexible process requiring cooperation with creditors, but not necessarily with all of them.

Who can use it?

Regulations on Foreign Direct Investment (FDI) are becoming increasingly influential, especially in M&A transactions. It is essential to consider how these regulations will affect foreign creditors, particularly those from non-EU countries. The Slovak FDI Act will have numerous implications for financing and security arrangements.

Security package

After a delay of more than a year, an act on preventive restructuring (the "Act") implementing the EU directive on preventive restructuring frameworks finally became effective in the Czech Republic on 23 September 2023. The long-awaited Act introduces a brand-new legal tool preventing the insolvency of viable enterprises in temporary financial distress.

What is preventive restructuring and why use it?

"Bulgaria transposed the Restructuring Directive's prohibition to terminate contracts via ipso facto clauses, but also (deviating from the Directive) prohibited contractual set-off in restructuring, thus rendering the preservation of many contracts performed via contractual set-off / netting of payment meaningless. So, in drafting ipso facto clauses the impossibility to perform contracts in restructuring, due to the contractual set-off prohibition, may be utilised as an additional trigger for termination, now".

With insolvencies expected to increase in the UK’s construction industry this year, as higher interest rates, inflation and an anticipated domestic recession dampen demand for housing and new commercial projects, we are often asked what protections an Employer can put in place in their contract to assist in the event of their contractor going into insolvency.

These issues should be considered at the time of entering into contracts and we have set out below some useful provisions which may assist should an insolvency occur during a project. These are:

NFTs are a hot topic, but their treatment under insolvency law – which will receive more attention due to the recent crisis – has not yet been explored in much detail. This contribution aims to provide a brief overview of the most relevant issues.

NFTs as collateral