• Latest EU insolvency directive to bring about change in Ireland
• Amendments to directors’ duties and pre-packs of particular interest

Opportunities for Irish restructuring lawyers to capitalise on the shifting post-Brexit landscape and promote Ireland as an international restructuring hub had already emerged in the pre-pandemic years. The Irish were aided in their campaign by high-profile cases such as Ballantyne Re – which endorsed the Irish scheme’s potential – and Asia Pulp and Paper’s innovative use of the Irish system.

Fast forward to 2026, and further significant cases, including Mallinckrodt, Endo, Nordic Aviation Capital, Norwegian Air and Celtic Roads (Waterford) continue to fly the flag for Ireland, highlighting the utility of Irish restructuring tools – either alone or in tandem with other international processes such as US Chapter 11 proceedings.

In the second of a two-part report, Debtwire’s legal analyst team looks at future reform, including that mandated by the latest EU insolvency directive, and also touches on litigation and liability management exercises (LMEs) in Ireland.

In Part 1, we recapped the fundamentals of the Irish restructuring system, noted some key cases, and considered what is working well and criticisms of the regime.

Harmonised horizon?

Back in 2022, the Irish Companies Act was amended to implement the 2019 EU Restructuring Directive, although the Irish system was already largely compliant with the Directive and the Irish reforms were less drastic than those seen in other jurisdictions.

Fast forward to 2026, and in April, Directive (EU) 2026/799 of the European Parliament and of the Council of 30 March 2026 harmonising certain aspects of insolvency law, being the latest EU directive affecting the European restructuring and insolvency sphere, was published in the EU Official Journal.

The Directive aims to ‘harmonise’ various areas of insolvency law by setting out minimum standards, and deals with five areas of the law, being (i) avoidance actions; (ii) pre-packaged insolvency sales (pre-packs); (iii) creditors’ committees; (iv) insolvency filing duties and (v) asset tracing. Our previous analysis contains further details.

The EU insolvency and restructuring landscape is characterised by a patchwork of diverse regimes, with each EU member state having its own laws. However, over recent years, the European Commission has spearheaded a move towards “harmonisation” of member states’ restructuring and insolvency frameworks, and the Directive is the latest step in this movement. EU member states now have until January 2029 to bring into force the bulk of the necessary laws, regulations and administrative provisions to comply with the Directive.

For Ireland, Stephen Ahern, a partner at A&L Goodbody in Dublin noted the most significant change is likely to be the duty to file for insolvency within three months of a director becoming aware that the company is insolvent. “While Ireland already has reckless trading and fraudulent trading provisions that impose consequences for continued trading while insolvent, a formal mandatory filing obligation with a defined timeline would be new,” he said, adding that how this interacts with the examinership planning phase (which typically involves several months of preparation, including assembling the independent expert’s report and, in larger cases, negotiating an RSA) will need to be carefully worked through when the Directive is implemented into Irish law.

On avoidance actions, the Directive’s harmonised look-back periods are in each case shorter than the existing look-back periods under Irish law. The Directive expressly permits Member States to retain more protective national provisions. Ireland may, therefore, require no substantive change to its existing avoidance action framework.

Ahern adds that while Ireland has an established practice of pre-pack sales conducted through receivership, there is no dedicated statutory framework governing the process. The Directive will change that, introducing for the first time formal requirements for an independent monitor, a best-interest-of-creditors test, and either a public auction or court authorisation before a pre-pack sale can proceed.

Burke Legal’s Kathlene Burke agreed that the Irish restructuring system “will need to change quite a bit,” predicting that, like Germany and Spain, the biggest modification will be the addition of pre-packs to the toolkit. Meanwhile, in her view, the adjustments required regarding directors’ duties is the most controversial aspect. Burke adds that it is likely Ireland will adjust the definition of insolvency to reduce the impact on the duty to file. Meanwhile, the impact on creditors’ committees, avoidance actions and asset tracing will be less material.

Liability management 

A more aggressive, US-style form of liability management exercises (LME) is a hot topic in the global restructuring space right now. But how is this trend playing out in Ireland?

Ahern explained that while the more aggressive, US-style LMEs of recent years have not been a central feature of the Irish market, liability management in a broader sense is “not unfamiliar territory.” Indeed, Irish Bank Resolution Corporation (formerly Anglo Irish Bank) conducted one of the more closely scrutinised LMEs – a consent solicitation and exchange offer on its subordinated notes that ultimately gave rise to the renowned Assenagon judgment – one of the leading authorities on the limits of creditor coercion in out-of-court restructurings.

More recently, Irish restructuring processes have demonstrated clear potential to facilitate the types of LME increasingly seen in the US market. Ahern gives the example of the Voyager Aviation restructuring (2021) which involved a stapled exchange offer with an Irish Part 9 scheme as a “Plan B” backstop, using a single-point-of-entry structure – an Irish subsidiary guarantee establishing noteholders as scheme creditors, with a third-party release then granted through the scheme in favour of the original issuers. “The structure closely resembled what Fossil Group executed through the English courts recently. The difference is that Voyager’s exchange achieved 98.49% participation and closed without the Irish scheme being activated, whereas Fossil’s fell short and the English [Part 26A restructuring] plan was needed to bind holdouts,” he said.

Most LMEs involve some combination of carrot and stick, and in Ahern’s opinion Irish schemes in particular are well-placed to serve as that stick. “The Irish courts have shown considerable flexibility in accepting jurisdictional hooks (including through newly incorporated SPVs (as in Lighthouse Pacific)), voluntary guarantees entered into specifically to establish creditor relationships (as in Voyager and Nordic), and deeds of indemnity and contribution (as in Endo)), and in sanctioning schemes that compromise obligations across an entire corporate group through a single Irish proceeding,” he said.

Ahern believes that for sponsors and borrower groups considering a scheme-backed LME, Ireland’s compressed timelines and lower cost base relative to comparable European proceedings make it a particularly attractive venue for the backstop.

Burke pointed out that while LMEs can be “a risky proposition or a Hail Mary pass,” market participants do them because they buy time and skip a costly, prolonged US court process. “That is exactly what the Irish toolkit gives you – speed: 100 days in Irish examinership, liquidity: ability to obtain funding that primes floating charges and finality: a court-sanctioned, binding deal through a scheme.” She added that a historic connection to Ireland is not essential to use their restructuring tools.

Contentious climate? 

While English in-court restructurings, in particular under Part 26A restructuring plans, are facing unrelenting litigation, in contrast, the Irish restructuring climate has been relatively non-contentious. Ahern explains that the Irish examinership law is now 36 years old (dating from the Companies (Amendment) Act 1990) and the key legal principles (unfair prejudice, relevant alternative, class composition and cram down thresholds) are pretty well-settled through decades of case law. “This leaves fewer opportunities for creditors to argue novel points of interpretation, in contrast perhaps to the Part 26A restructuring plan where fundamental concepts such as the “relevant alternative” test, the conditions for cross-class cram down, and the fair distribution of restructuring surplus remain unsettled and continue to be litigated at first instance and on appeal,” he concluded.

Ahern notes that where challenges do arise, the Irish courts have shown they can be dealt with “quickly and decisively”. Ahern pointed to Ballantyne Re, where a minority US creditor contested the Part 9 scheme at the sanction hearing, and the court heard the challenge and delivered a comprehensive 56-page judgment the following day. “The entire process from convening hearing to full implementation of a USD 1.65bn restructuring was completed in six weeks,” he said, adding that in both examinerships and schemes, costs follow the event in the usual way: an unsuccessful challenger to a scheme or examinership will ordinarily be liable for the other side’s legal costs which is a natural deterrent to speculative or tactical challenges.

Burke attributes the Irish restructuring climate, which is not very litigious, partly to champerty and maintenance. “In order to fight, you have to fund the litigation yourself. Many are not willing to throw good money after bad,” she said.

Synergies for success 

Ireland has certainly become an important international debt restructuring venue, with some high-profile cases having passed through its courts in recent years, as highlighted in this two-part analysis.

Irish practitioners have been aided by the similarities between US Chapter 11/examinership and UK and Irish schemes of arrangement and the country’s unique position with regards to ensuring recognition and enforcement in the EU and beyond. Going forward, we expect restructurings to become increasingly multi-faceted, requiring combined solutions rather than a focus on any particular jurisdiction’s toolkit, and Ireland is well-poised to continue to play a key role in some significant cases.

Notably, Trinseo recently filed for Chapter 11 and court documents referenced the potential for an Irish proceeding concurrently with the Chapter 11 case.