Brussels is to venture into the politically sensitive area of pan-European bankruptcy rules, saying the continent needs a version of the US Chapter 11 system to make the most of its entrepreneurial potential.
The European Commission said its plans would offer struggling businesses breathing space from creditors and stop value being destroyed by companies going to the wall.
Insolvency should not always lead to the closing of the company and selling off the assets, said Valdis Dombrovskis, a vice-president of the commission. If the company is viable it should be given a second chance.
The commission announced the move as part of a package intended to make legal systems less harsh on entrepreneurs, amid fears that some countries make …
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