Luxembourg implemented EU Directive 2019/2121 on cross-border corporate mobility with a new law effective March 2, 2025, applying to transactions with terms published from April 1, 2025. This aligns Luxembourg with EU standards, providing a secure legal framework for cross-border conversions, mergers, and demergers involving Luxembourg SAs, SCAs, and SARLs. Key changes include:

• Minority Shareholder Rights: Opposing shareholders can exit with monetary compensation; remaining shareholders can dispute share exchange ratios.
• Creditor Rights: Creditors can seek court-ordered securities within three months of draft terms publication.
• Shareholder Communication: Management must provide a detailed transaction report, waivable by unanimous shareholder agreement (not applicable to single-shareholder companies).
• Employee Communication: Management must report on the transaction's impact on employees, unless the company and subsidiaries have only management as employees.
• Independent Expert Evaluation: An auditor assesses the fairness of exchange ratios and cash compensation, waivable by unanimous shareholder agreement (not applicable to single-shareholder companies).
• Anti-abuse Oversight: Notaries verify procedural compliance before transaction completion.
• EU Migration: Cross-border conversions (migrations) are subject to similar rules and a one-month waiting period.

The law also simplifies procedures for national transactions and non-EU cross-border transactions, including streamlined mergers for sister companies and reduced requirements for single-shareholder companies and non-EU deals.

Read the full article at MOLITOR Avocats à la Cour

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Romania's Energy Minister assures that the Iernut gas-fired power plant, which is 97% complete, will be completed despite potential insolvency of Spanish builder, Duro Felguera. Direct payment of subcontractors by Romgaz is a key solution. The project, initiated in 2016 and stalled in 2019, faces a June 2 2025 deadline.

Romanian Minister of Energy, Sebastian Burduja, emphasized zero tolerance for further delays, citing Duro Felguera's financial woes and pre-insolvency proceedings. General Electric's agreement to resume contracts is crucial. Romgaz and the Ministry will prioritize project completion, with detailed deadlines and responsibilities set.

Duro Felguera's pre-insolvency hinges on a debt-to-equity conversion, which requires state approval. Failure of this risks insolvency, jeopardizing June commissioning deadline, which has already been extended by six months. The minister guarantees all efforts to complete the plant.

Full story here.

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On 12 March 2025 Northvolt released the news that, having exhausted all efforts to save the future of the company, Northvolt AB has filed for bankruptcy in Sweden after facing severe financial challenges. The EV battery manufacturer has struggled with rising costs, supply chain disruptions, and fluctuating market demands. Internal production ramp-up issues further increased the financial strain.

The bankruptcy process will be overseen by a Swedish court-appointed trustee, Mikael Kubu. The trustee will manage the sale of assets and settle obligations, ensuring a smooth transition for employees and creditors. Notably, Northvolt's German and North American subsidiaries are not included in the Swedish filing. The company's leadership expressed hope that the groundwork laid, including technological advancements and production improvements, would attract new investment during the bankruptcy proceedings.  

Northvolt acknowledged the impact on its stakeholders, emphasising its commitment to supporting employees during this transition. The company highlighted its achievements, including producing one million sustainable battery cells and improving production efficiency. Despite these successes, the financial pressures proved insurmountable.

More details here. 

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UK fashion store Quiz Clothing has fallen into administration this year, with professionals from Teneo handling the process. The news comes weeks after consultants from Interpath were tasked with advising the group’s leading lenders on its mounting crisis.This follows a period of financial instability and recent delisting from the London Stock Exchange. Chaired by Peter Cowgill, former JD Sports Fashion boss, Quiz Clothing operates roughly 60 standalone stores and dozens more concessions, with around 1,500 employees.The business had previously flagged concerns about its ability to continue as a going concern, prompting its principal lender, HSBC, to seek advisory support from Interpath.

The administration has resulted in the closure of 23 of Quiz's 60 standalone stores, leading to approximately 200 redundancies. The remaining assets of Zandra Retail, which operates Quiz's UK and Irish stores, will be acquired by Orion Retail, a subsidiary controlled by the Ramzan family, in a pre-pack administration. Quiz's online business, international operations, and concessions remain unaffected. 

CEO Sheraz Ramzan attributed the decision to "continuing challenging trading conditions," emphasizing the need for a more sustainable footing. Teneo's joint administrator, Gavin Maher, acknowledged the difficult time for employees and stakeholders, while highlighting the job preservation achieved through the sale. The company had reported a pre-tax loss of £4.7m and a revenue decline in its most recent financial results.

Full article here

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In 2024, Europe experienced a significant restructuring landscape, though not the wave of insolvencies some had predicted. Analysts foresee a prolonged down-cycle without extreme fluctuations, partly due to covenant-lite structures and available investment funds. Covenant-lite terms and debtor-friendly insolvency laws have enabled companies like Altice and Ardagh to pursue aggressive liability management transactions, a trend that may grow in 2025. However, uncertainty remains over the viability of these transactions following the Serta ruling in the US.

The UK’s Part 26A restructuring plan (RP) remained the preferred restructuring tool, with key cases such as Adler and Thames Water shaping legal precedent. RPs continued to be used to cram down creditors, including landlords, in cases like Cineworld and Virgin Active. As RPs become more common, courts have reinforced the importance of proper litigation strategies when challenging them, with cases like Chaptre Finance highlighting the need for expert evidence and procedural compliance.

Beyond restructuring plans, liability management transactions became more prominent in Europe, with creditors using cooperation agreements to counteract aggressive debt moves. Additionally, financial distress in key sectors, such as the UK’s privatised water industry and higher education, could lead to further restructuring activity in 2025. Thames Water’s RP and the financial struggles of universities, exacerbated by rising costs and reduced student enrollment, are expected to be major focal points in the coming year.

Read the full article at Cadwalader which includes examples and full references

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