International Experience: How Preventive Restructuring Works Abroad

The Ukrainian reform did not emerge in a vacuum — it is part of a broader European trend toward introducing early corporate recovery procedures. Directive (EU) 2019/1023, which underpins our national changes, has spurred reforms in many EU countries over the past six years. Its principles represent a kind of “gold standard” in modern insolvency policy: to give viable businesses the opportunity to restructure at an early stage, thereby preventing the accumulation of non-performing loans in the banking system and preserving the economic value of enterprises.

Many EU states have implemented these provisions, and the first results can now be evaluated.

Since 2021, the Netherlands has introduced its own procedure known as WHOA (Wet Homologatie Onderhands Akkoord) — a Dutch restructuring scheme conceptually similar to the Ukrainian model. In the first year of its operation, Dutch courts received around 100 restructuring applications and issued dozens of rulings. This indicates strong business demand for the new instrument — “the new law is living up to its potential and is being applied creatively and pragmatically,” as local lawyers point out. WHOA has helped rescue both small and large companies. For example, major international groups such as Steinhoff and Diebold Nixdorf successfully restructured multi-billion-euro debts through Dutch courts in 2023. Judicial procedures move fairly quickly: the first restructuring plan was approved just 1.5 months after the law came into force. The Dutch experience is also notable for the active use of available tools: in more than 80% of cases, courts granted a cooling-off period (moratorium), and in roughly 75% — upon the debtor’s request — appointed a restructuring expert to assist with the plan. This demonstrates that, with proper legal application, preventive restructuring can become a routine and effective mechanism rather than an exceptional measure.

Germany also enacted its StaRUG law (Gesetz über den Stabilisierungs- und Restrukturierungsrahmen) in 2021 — a pre-insolvency restructuring framework with minimal court involvement. Although German data is less publicly available, there are known cases where medium-sized companies restructured their debts successfully under StaRUG, avoiding formal insolvency proceedings.

France, Italy, Spain, Poland, and other countries have updated their laws by introducing or improving early intervention procedures (concordats, observation procedures, rehabilitation schemes, etc.) in line with the Directive. For example, France has long used the mandat ad hoc and conciliation procedures, which allow companies to negotiate with creditors under judicial oversight without initiating formal bankruptcy. The Directive prompted the enhancement of these tools through mechanisms such as cram-downs and moratoriums to align fully with EU standards. Greece and Romania are among the countries where the Directive led to the creation of entirely new procedures, similar to Ukraine’s. These are still in the early stages of implementation and are undergoing their first test cases (Ukrainian professionals are actively studying these examples at specialized forums).

Although no longer part of the EU, the United Kingdom introduced a new procedure in 2020 — the Restructuring Plan — which shares key features with the Directive’s framework (cross-class cram-downs, DIP financing, etc.). This tool has already been used by prominent companies (e.g., Virgin Atlantic) to restructure their debts during the pandemic. While outside the Directive's scope, the UK’s experience reflects a global trend: lawmakers around the world are prioritizing the rescue of viable businesses over their liquidation when recovery is feasible.

Experts at INSOL Europe emphasize that the main purpose of preventive restructuring is to save viable enterprises. They stress that the procedure is designed for businesses that have the potential to succeed but have been caught in a financial storm and have not yet entered the phase of full insolvency. Conversely, companies without recovery prospects should be liquidated as swiftly as possible — this principle is also enshrined in the EU Directive. This balance is crucial: the law provides a rescue tool, but not for artificially sustaining “zombie firms.”

If a business is unviable, it is better not to waste time on futile restructurings that only generate further losses to the detriment of creditors, employees, and the economy at large.