Directive (EU) 2026/799 harmonising aspects of insolvency law

Directive (EU) 2026/799 of the European Parliament and of the Council of 30 March 2026 harmonising certain aspects of insolvency law

I. Overview

On 30 March 2026, the EU legislative process on the Directive on the harmonisation of certain aspects of insolvency law (Directive (EU) 2026/799) was completed. The Directive is originally based on a proposal published by the European Commission in 2022. An agreement on the final text between the Council and the European Parliament was reached on 30 March 2026. Following its publication, the Directive will enter into force on 21 April 2026.

Following the Preventive Restructuring Directive (Directive (EU) 2019/1023), which led to the introduction of preventive restructuring frameworks in many Member States, this new Directive represents a further step towards the harmonisation of insolvency law within the EU. Its objective is to remove obstacles to the internal market and the capital markets in the EU arising from divergent national insolvency regimes, which have contributed to legal uncertainty and made the outcome of insolvency proceedings less predictable.

The Directive addresses five core areas: avoidance actions, tracing of assets, pre-pack proceedings, directors' duties and creditors' committees. As a directive, it leaves Member States discretion, within the options and minimum standards it sets, as to how they transpose its requirements into national law.

II. Avoidance Actions

A key feature of the Directive is the introduction of common minimum standards for avoidance actions, aimed at safeguarding and maximising the value of the insolvency estate.

Articles 7, 8 and 9 define three main categories of avoidance actions.

Article 7 covers preferential transactions: legal acts that benefit one creditor or a group of creditors to the detriment of the general body of creditors. Such acts can be challenged if they are perfected within three months before the request (or, in the absence of a request, the decision) to open insolvency proceedings, or between that point and the opening of proceedings, with additional knowledge requirements for "normal" payments and a rebuttable presumption of knowledge for closely related parties.

Article 8 addresses transactions without consideration or for manifestly inadequate consideration. These can be subject to an avoidance action if they are perfected within 12 months before the request (or decision) to open insolvency proceedings, or between that point and the opening of proceedings, with an option for Member States to exclude symbolic, low‑value gifts.

Article 9 deals with transactions carried out with intent to prejudice creditors. An avoidance action is available where the debtor intended to harm the general body of creditors, the other party knew of this intent, and the act was perfected within two years before the request (or decision) to open insolvency proceedings, or between that point and the opening of proceedings, again with a rebuttable presumption of knowledge for closely related parties.

The introduction of a more stringent avoidance regime at EU level is likely to require more extensive implementation efforts in some Member States, whereas jurisdictions that already operate under comparatively strict avoidance rules, such as Germany, will probably only need to make targeted, incremental adjustments. In particular, it is fully compatible with the Directive if Member States already provide for longer hardening periods for insolvency avoidance actions in their existing national regimes.

III. Tracing Assets

Building on the avoidance action regime, the asset tracing provisions are designed to give insolvency practitioners more effective tools to identify and follow asset transfers across Member State borders. In particular, the Directive facilitates access to bank account information, beneficial ownership data and key national registers and databases, so that assets which should form part of the insolvency estate -- or which may be the subject of an avoidance action - can be located and, ultimately, realised for the benefit of the general body of creditors, thereby maximising the value of the estate.

The Directive provides for different levels of access to information for asset tracing. With regard to bank account information, Member States must designate courts or administrative authorities that are empowered to access and query national and cross‑border bank account registers, where an insolvency practitioner so requests and the information is necessary to identify and trace assets belonging to the insolvency estate or assets that may be subject to an avoidance action. However, as the Directive sets only minimum standards, Member States may allow insolvency practitioners direct access to their national bank account registers. By contrast, when it comes to identifying the beneficial owners of companies and other legal arrangements, the Directive requires that insolvency practitioners are granted timely access to such information through interconnected national registers and to specified national asset registers and databases.

IV. Pre-pack provisions

With 19 articles, the provisions on pre-pack proceedings form a central element of the Directive. The EU defines a pre-pack as a procedure comprising a preparation phase and a liquidation phase, which enables the sale of the debtor's entire business (or in part) as a going concern to the highest bidder in the course of insolvency proceedings. The rationale for establishing such a procedure across the EU is the assumption that liquidating a business, or parts of it, by way of a going-concern sale will generally realise a higher value than a piecemeal liquidation of its assets.

1. Preparation Phase

The preparation phase covers the pre-pack proceedings aimed at identifying an appropriate purchaser for the debtor's business, or parts of it. This phase commences with the appointment of a monitor who is independent of the debtor, with the specific appointment mechanism determined by the relevant national law. The monitor must be free from any conflicts of interest in relation to the debtor or any connected party.

Member States are required to ensure that the sale process is conducted in a competitive, transparent and fair manner and in line with market standards. Throughout this process, the monitor must record and report each step taken. The duration of the preparation phase must be limited in time. To safeguard this phase, Member States must ensure that a stay of individual enforcement actions is available, which in substance corresponds to the moratorium provided for in Articles 6 and 7 of the Preventive Restructuring Directive (Directive (EU) 2019/1023).

2. Liquidation Phase

The liquidation phase covers the pre-pack proceedings aimed at approving and implementing the sale of the debtor's business, or parts of it, and distributing the proceeds to creditors. It begins with the opening of formal insolvency proceedings; conducting the liquidation phase within a preventive restructuring framework is excluded.

Once the liquidation phase has commenced, the court or the competent authority must authorise the sale in at least one of the following cases: (1) the acquirer proposed by the monitor; (2) the acquirer selected in a public auction; or (3) the sale to an acquirer approved by the creditors. In any public auction, the bid identified by the monitor during the preparation phase is to serve as a "stalking horse" bid. The stalking-horse bidder may be granted reimbursement of its costs if it is ultimately outbid in the auction.

To avoid value erosion through the termination of key contracts and to ensure a smooth transfer of the business, Member States must ensure that contracts essential for the continuation of the business can be transferred to the purchaser without the counterparty's consent, subject to limited exceptions where consent may be required. This is a mechanism that, to a certain extent, overrides fundamental principles of civil law in some Member States. From a financing perspective, interim financing is to benefit from specific protections, in particular protection against avoidance.

In addition, creditors are expressly permitted to submit a credit bid, i.e. to use their secured claims as (part of) the consideration for the acquisition of the business. Crucially, however, the Directive provides that any set-off of such secured claims against the purchase price is strictly capped at the market value of the business. This limitation is designed to prevent secured creditors from "over-credit-bidding" and effectively acquiring the business without paying a price that reflects its true economic value. By tying the maximum credit bid to market value, the Directive seeks to preserve a level playing field between secured creditors and third-party bidders, to avoid distortions of the competitive sale process.

V. Director`s duty to request the opening of insolvency proceedings and civil liability

A delayed filing for insolvency can significantly depress realisation values to the detriment of creditors. Against this backdrop, the Directive imposes a duty on directors to submit a request for the opening of insolvency proceedings from the point at which they become aware, or can reasonably be expected to have become aware, of the company's insolvency. From that moment, directors are required to file for insolvency within a period of three months. Member States may define "insolvency" independently of the trigger for opening formal insolvency proceedings and, where multiple insolvency thresholds exist, determine which threshold gives rise to the directors' filing obligation.

As an alternative to a formal insolvency filing, the Directive permits an implementation option under which directors may discharge this duty by publicly disclosing the company's insolvency in a designated public register, thereby enabling creditors themselves to petition for the opening of insolvency proceedings.

In the event of non-compliance, Member States must introduce civil liability for directors.

This requirement constitutes a minimum harmonisation standard and does not affect more stringent national regimes, including those providing for e.g. shorter filing periods. However, it should be noted that all Member States which provide for a duty to file for insolvency apply a shorter period than the one laid down in the Directive.

VI. Creditors Committee

The introduction of creditors' committees is intended to ensure adequate creditor involvement in insolvency proceedings: a committee must be established after the opening of proceedings where requested or resolved by the creditors' meeting (subject to exemptions based on the nature and scale of the debtor's business), while Member States remain free to provide for such committees before the opening of proceedings and, in the EU's view, even in the context of preventive restructuring frameworks.

Acting in the collective interest of creditors, the creditors' committee participates in the proceedings and oversees the insolvency practitioner or debtor in possession, while Member States may confer approval rights over key decisions (such as business or asset sales) and must provide for civil liability in cases of intentional or grossly negligent breaches of duty, with the option to align the committee's liability with that of an insolvency practitioner where decision-making powers, e.g. approval rights for transactions, are delegated to it.

It remains to be seen whether the establishment of creditors' committees -- and the resulting enhanced involvement of individual creditors -- in certain Member States will, in practice, come at the expense of the very efficiency of insolvency proceedings that the Directive also seeks to promote across the EU.

VII. Key information factsheet

The Directive requires Member States to publish concise, standardised key information sheets on the core features of their insolvency regimes (including opening conditions, claim filing, ranking and distribution, and average duration of proceedings), in order to enhance transparency and enable (potential) investors to better assess insolvency risks across jurisdictions.

VIII. Next steps and Implementation phase

With the publication of the Directive in the Official Journal of the European Union on 1 April 2026, it will enter into force on 21 April 2026 (20 days after its publication). Member States must implement the Directive in their national laws by 22 January 2029 and notify the Commission accordingly. The specific provisions on access to bank account information (Articles 15-17, insofar as they relate to BARIS) must be implemented by 10 July 2029.