POST-WAR ECONOMIC RECOVERY OF UKRAINE: WHAT ROLE COULD THE EU PREVENTIVE RESTRUCTURING DIRECTIVE 2019/1023 PLAY FOR THE UKRAINIAN SMALL AND MEDIUM-SIZED ENTERPRISES?

Pre-trial restructuring is considered an efficient tool for avoiding
bankruptcy litigation, minimizing bankruptcy stigma, and preserving
viable businesses for both the debtor and its creditors. Developed in the
United States (US), many other jurisdictions, including the European
Union (EU), have adopted it, with particular attention to small and
medium-sized enterprises that are vulnerable to economic problems and
bankruptcy (Preventive Restructuring Directive 2019/1023). Germany
was among the first EU jurisdictions to implement the Directive, while
the United Kingdom (UK) introduced cross-class cramdown and other
restructuring law amendments to remain an attractive “restructuring hub”
in Europe post-Brexit. Although not without caveats, the German and
UK experiences provide interesting examples for other jurisdictions
looking to improve their bankruptcy and insolvency laws. The COVID19 pandemic and Russia’s aggression against Ukraine have had a
catastrophic impact on Ukraine’s economy, particularly on small and
medium-sized businesses. This article argues that Ukraine should further
develop pre-trial restructuring, based on the prudent implementation of
the EU acquis (as a precondition for future EU membership) and best
practices from jurisdictions such as Germany and the UK. Doing so may
become an efficient tool for restoring Ukraine’s economy, preserving
jobs, and maintaining social peace after the war.