DENMARK Law and Practice Contributed by: Henrik Sjørslev, Peter H. Knudsen, Henrik Lund-Koefoed and Levent Kitir, DLA Piper Denmark
DLA Piper Denmark Oslo Plads 2 Copenhagen DK-2100 Denmark Tel: +45 33 34 00 00 Email: Denmark@dk.dlapiper.com Web: www.dlapiper.dk
1. Overview of Legal and Regulatory System for Insolvency/Restructuring/ Liquidation 1.1 Legal Framework The principal piece of legislation underpinning Danish insolvency law is the Danish Bankruptcy Act, which contains procedural and substantive provisions per - taining to formal insolvency proceedings, including provisions on: • the opening of (preventative) insolvency proceed - ings; • appointment of a trustee/restructuring administra - tor; • claw-back/avoidance; • creditor voting rights; and • priority of claims, etc. The Danish Bankruptcy Act contains provisions regarding insolvency proceedings both for companies and for natural persons. The rules on in-court restruc - turing were significantly amended in March 2021 and July 2022. The Bankruptcy Act also contains rules on “insolvency quarantine”, which were revised in 2024. Pursuant to these rules, the trustee of a bankruptcy estate must investigate whether the management of the bankrupt business has grossly mismanaged the business and is therefore deemed unfit to participate in the manage - ment of other businesses. If relevant, the trustee must make a petition to the bankruptcy court to initiate sep - arate insolvency quarantine proceedings against the
management and inform the general body of creditors of the quarantine petition. The advisory body to the Danish Ministry of Justice on matters concerning insolvency law published its recommendations for amendments of the Danish leg - islation to prevent insolvency practitioners from being appointed as bankruptcy trustees, and restructuring administrators, in cases where they are not sufficient - ly neutral on 27 March 2025. A bill introducing the amendments into law is expected before year-end 2025. Underpinning the Bankruptcy Act is the Danish Administration of Justice Act, which promotes coher - ence between the bodies of law on formal insolvency proceedings initiated in the interest of the entire body of creditors, and individual enforcement proceedings before an enforcement court, initiated in the interest of a single creditor. Furthermore, the Danish Companies Act contains provisions regarding the responsibilities associated with the management of public and private limited companies. In addition, the Danish Criminal Code and the Danish Act on Bookkeeping both sup - port the overall regulation of insolvency matters. The EU rules (especially the Bank Recovery and Reso - lution Directive (BRRD) and BRRD II) regarding the recovery and resolution of credit institutes and invest - ment firms have been implemented into Danish law. The EU rules stipulate a number of procedural and material provisions for the recovery and resolution of credit institutes and investment firms, and the recog - nition of insolvency proceedings within the EU in the financial sector.
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