Creditor Protection in Cross-Border Conversions, Mergers and Divisions

Abstract

This paper elaborates on the protection of creditors in cross-border conversions, mergers and divisions, according to Directive 2019/2121/EU as regards these cross-border operations. After presenting the protection mechanisms available to creditors in cross-border operations prior to the adoption of the 2019 Directive, as well as the risks faced by creditors in such events, the author presents the system of creditor protection introduced by the Directive. Both creditor protection mechanisms in the broader sense (which are not designed exclusively for creditors) and the ones in the narrower sense (which are created only for their protection) are presented in the central portion of the paper. Among the latter group, the general protection mechanisms available for each cross-border operation are analysed, followed by the mechanisms that are specific to individual operations.