By Yasmine EDDAM
7 April 2025
The European Union has created a single market where companies can easily operate in several countries. But this economic freedom raises a thorny question: what happens when a company operating in several Member States encounters serious financial difficulties or goes bankrupt? Without common rules, chaos would quickly ensue, with competing procedures, contradictory decisions and a great deal of uncertainty for everyone. To avoid this, the EU has put in place a specific framework to manage these situations: the European Regulations on Insolvency Proceedings (the most recent being Regulation (EU) 2015/848). This article explains the main principles of this European system. Why specific European rules? Before these regulations, each country applied its own national rules, even for international bankruptcies. This led to a number of problems: multiplication of procedures: the same company could be subject to a number of different...
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