What changes for companies, directors and creditors?
Directive (EU) 2026/799 of the European Parliament and of the Council of 30 March 2026 (the Directive”) was published on 1 April 2026. It establishes a framework for the minimum harmonisation of certain substantive aspects of insolvency law in Member States. The Directive is also relevant to the European Economic Area.
April 2026 - Until last week, an investor assessing a distressed exposure in another EU member state had to navigate up to 27 different insolvency regimes, each with its own rules on look-back periods, directors' obligations, asset recovery, and creditor rights. Recovery timelines ranged from seven months to seven years.
A key new directive harmonising certain aspects of insolvency law was published in the Official Journal of the European Union on 1 April 2026.
Introduction
On 10 March 2026, the European Parliament formally approved the long-awaited Directive harmonising certain aspects of insolvency law (the Directive) which will now be sent to the Council for final approval. The Council is expected to formally adopt the Directive by the end of this month after which it can be published in the Official Journal of the EU and enter into force. The Directive covers five pillars:
Harmonising EU insolvency law: colegislators reach agreement on compromise text for a new directive — key changes and what is next 8 DECEMBER 2025 EU insolvency law © A&O Shearman 2 EU directive harmonising certain aspects of insolvency law Overview and status The European Parliament and the Council (the co-legislators) reached political agreement on the proposed Directive harmonising certain aspects of insolvency law on 19 November 2025. The final compromise text was confirmed and circulated in early December 2025.
In our earlier blog, "EU insolvency law: Member States move closer to harmonisation", we examined how proposals to harmonise insolvency law across the European Union are gathering pace with a draft Directive to harmonise certain aspects of insolvency law being negotiated. And the pace is, indeed, continuing.
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 27th March 2025, the Court of Justice of the European Union (“CJEU”) delivered a ruling in the case Matthäus Metzler, acting as insolvency practitioner in insolvency proceedings vs. Auto1 European Cars BV (Case C‑186/24) concerning the interpretation of Article 31(1) of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (the “Insolvency Regulation”).
On 13 December 2024, EU member states agreed on a ‘partial’ general approach to the harmonisation of insolvency law.