Insolvency Laws – Moving in the Right Direction

At the end of November 2025, the EU co-legislators reached a provisional agreement on the European Commission’s proposal for a Directive harmonising certain aspects of insolvency law. Leaseurope has been closely following the EU legislative process on this initiative and engaged regularly with the EU stakeholders to convey the industry’s messages. The final agreement takes on board many of Leaseurope’s views, eliminating any major concerns for lessors.

According to the agreement, a so-called pre-pack proceeding will become available in all EU Member States, meaning that the sale of the debtor's business (or part of it) before opening of insolvency proceedings is possible in order to avoid the liquidation of the company. In this proceeding, it is possible to automatically transfer contracts which are essential for the continuation of the business, including financial services contracts, (so-called executory contracts) from the debtor to the buyer of the business without the consent of the debtor's counterparty.

As Leaseurope called for, some safeguards in pre-pack proceedings aiming to protect freedom of contract are included regarding the automatic transfer of contracts: a) depending on the contract, the quality of the parties, or the interests of the business, Member States have the option to require the consent of the debtor’s counterparty and b) Member States may provide that the counterparty is allowed to terminate the assigned contract, provided that the assignment of the contract would unfairly prejudice the counterparty.

The special regime of winding-up of microenterprises is removed from the initial text, also in line with Leaseurope's position. Member States may maintain or introduce national laws establishing simplified winding-up proceedings for microenterprises. The removal of this EU-wide special regime means that some inconsistencies in the legal text regarding leased assets are also removed; something about which Leaseurope had called for clarification and amendments to ensure that leased assets are separate from the (lessor’s) insolvent estate.

Other main elements of the agreement are the requirement for the Member States to make publicly available a standardised key information factsheet on the  national insolvency proceedings rules and the possibility for courts to access and search national centralised bank account registers and bank account registers held in other Member States in order to provide information to insolvency practitioners. Insolvency practitioners will also have access to beneficial ownership registers. Finally, minimum rules on avoidance actions are introduced. This means that contracts concluded three months before the submission of the request that led to the opening of the insolvency proceedings become null and void, if there is already knowledge that the debtor is in financial distress and the contract benefits certain creditors only and is detrimental to others.

As next steps, the EP in plenary session will need to formally adopt the agreed legal text, the vote for which is most likely going to take place on 9 March 2026. Once approved by the EP, the agreed legal text will have to be approved by the Council of the EU and following that it will be published on the Official Journal of the EU and enter into force.

For more information, please contact Stella Mitta at s.mitta [at] leaseurope.org