Preventive Restructuring Framework

A revolution is imminent in the field of corporate restructuring: The EU Commission will shortly put into force a directive for the EU-wide introduction of the "Preventive Restructuring Framework". Behind this are far-reaching changes: For the first time, the Preventive Restructuring Framework offers crisis companies a legally protected framework in which they can fundamentally restructure themselves without insolvency proceedings. The EU Commission is thus pursuing the goal of simplifying the restructuring of companies and promoting the restructuring culture in the EU.

It will still take some time before the directive is transposed into German law. But companies are well advised to prepare in good time for the new world of restructuring. For this reason, we have summarized briefly below what will essentially change as a result of the "Preventive Restructuring Framework".

The stigma of insolvency disappears

Companies that use the "preventive restructuring framework" are expressly not insolvent. Nevertheless, these companies can use many restructuring instruments that were previously only available in insolvency proceedings. For example, a payment moratorium can be declared for four to twelve months. In this phase, they are exempt from the obligation to file for insolvency and protected from enforcement measures by creditors.

Insolvency administrators no longer exist

If a company wants to use the "preventive restructuring framework", the management still has to file an application with the competent insolvency court. However, the court then no longer appoints an insolvency administrator. It is true that in certain cases a so-called "restructuring administrator" will have to be appointed. However, this administrator will then only have a supervisory function. It has not yet been conclusively determined when a "restructuring administrator" will be necessary.

The entrepreneur remains the boss of his/her own company

During the entire phase of the "preventive restructuring framework" - and also afterwards - the original management remains at the helm and controls the restructuring. In particular, the management develops the "restructuring plan" together with the creditors. This plan is the statutory basis for operational and financial restructuring. The plan regulates everything that is necessary for successful restructuring. After all, it is the basis for convincing the majority of the creditors concerned to participate.

Creditors can be outvoted

If necessary, the mandatory "restructuring plan" divides the company's creditors into groups. In the final vote on the plan, creditors within the creditor groups can be overruled by a qualified majority. In this case, however, the competent court must confirm the plan before implementation. And if there is not a majority within all groups, the plan can also be accepted by the majority of the groups.

The preventive restructuring framework even provides for the so-called "second chance". This means that companies have the option of a residual debt discharge after a maximum of three years.

When can the restructuring framework be used?

The current draft still has to be officially adopted by the EU Parliament and the EU Commission. The Federal Government will then have two years to transpose the Directive into national law. Companies will soon be able to benefit from the restructuring framework.

Will there still be bankruptcies?

There will. But considerably fewer. So far, crisis companies have postponed the necessary restructuring measures for as long as possible because they wanted to avoid insolvency proceedings. In the future, companies will be able to benefit from the many advantages of insolvency proceedings without having to accept the biggest disadvantages.

Supplementary interview with Burkhard Jung (video) (only in German)

The full text of the Directive is available at


Further articles:

FINANCE Magazin (only in German)



Interview with Burkhard Jung

Burkhard Jung, Managing Director of consultancy Restrukturierungspartner and Chairman of the professional association for reorganization and insolvency consulting of the Federal Association of German Management Consultants BDU e. V., on the preventive restructuring framework.

Here you can watch the video (only in German).

BDU position paper on preventive restructuring framework

In its recently published position paper on the preventive restructuring framework, the Fachverband Sanierungs- und Insolvenzberatung des Bundesverbandes Deutscher Unternehmensberater (BDU) (Pprofessional association for reorganization and insolvency consulting of the Federal Association of German Management Consultants BDU e. V.) has drawn up concrete implementation proposals for the proposed law. In addition, under the direction of Burkhard Jung, the professional association deals with the main topics - early warning system, path to the restructuring framework, selection and qualification of the restructuring officer, restructuring plan and scope of possible restructuring measures.

The complete press release of the BDU can be found here (only in German).

Download BDU position paper (only in German):

FINANCE Magazine: "Preventive Reorganization: Who will be restructuring officer?"

A new guideline, several groups of candidates, a highly remunerated position: Who will secure the role of restructuring officer that will come with the preventive restructuring - advisor or insolvency administrator?

The preventive restructuring framework is hotly debated in the insolvency and restructuring industry. One aspect is the role of the restructuring officer. The FINANCE magazine asked Burkhard Jung, among others, for his article "Preventive restructuring: Who will be the restructuring officer?

Translated with

You can find the complete article here (only in German).