Insolvency 2025

DENMARK Law and Practice Contributed by: Henrik Sjørslev, Peter H. Knudsen, Henrik Lund-Koefoed and Levent Kitir, DLA Piper Denmark

of course only applies to the participating creditors). Capital injection as part of an informal restructuring is usually made pro rata between major creditors in order to keep a debtor afloat, or by parties closely related to the debtor in order to support the restruc - turing. New money can be secured against the com - pany’s assets to the same extent that the company could otherwise achieve. Danish claw-back rules, however, do allow for such new capital to be duly secured against the debtor’s assets without risk of subsequent claw-back/avoid - ance of that security. Under the new rules on preven - tative restructuring, a floating charge will not crystal - ise due to the preventative proceedings commencing (contrary to ordinary restructuring proceedings), there - fore allowing the charge to function as collateral for assets obtained during the proceedings. It is not possible to use the statutory restructuring pro - cess to determine the value of a claim and creditors. 4.3 The End of the Restructuring, Rehabilitation and Reorganisation Procedure If a company is in significant violation of the terms of a passed restructuring, the restructuring may be lifted, which in turn would resurrect any claims that have been subject to a haircut, thereby exposing the company to possible bankruptcy proceedings. Please also see 1.2 Types of Insolvency . 4.4 The Position of the Debtor in Restructuring, Rehabilitation and Reorganisation In addition to the following, please also see 1.2 Types of Insolvency . A court-appointed restructuring administrator must consent to all actions of significance during the restructuring process, including sales of assets. Such consent is usually given explicitly in writing, but can also be given implicitly by way of the restructuring administrator’s actions. A restructuring proposal adopted by the majority of the creditors is not valid or binding until it has also been ratified by the insolvency court. The insolvency court may reject a restructuring proposal even though

it carries the majority vote if it is disproportionate to the debtor’s financial situation. The court is required to reject a restructuring proposal if there has been any procedural misconduct, incompleteness of significant factual statements made by the debtor or non-compli - ance with the Bankruptcy Act, or if one or more credi - tors has been given preferential treatment outside the restructuring so as to influence the vote. Danish Legislation does not contain rules on out-of- court creditor agreements for the restructuring or reor - ganisation of a debtor. Assets In bankruptcy proceedings, the trustee is responsible for the sale of assets, either through the sale of indi - vidual assets or of the business as such. If a mort - gagee refuses to consent to the sale of a mortgaged asset, the trustee may request that the mortgaged asset be sold by way of a public, forced sale. In both bankruptcy and restructuring proceedings, anyone, including the pledgee/mortgagee, may bid on the asset in question. A bid “within” the pledgee/ mortgagee’s own security right is effectively set off against the secured debt. The only party who may not acquire the assets is the administrator/trustee/ restructuring accountant. The restructuring proceedings do not, as such, clear pledges and mortgages, and the sale of encumbered assets (which do not represent any excess value) must therefore be co-ordinated with such stakehold - ers. Such secured creditors can either demand cash payment or accept that the purchaser assumes the rights and responsibilities of the seller regarding the underlying debt. In restructuring, a sale of the business or a separate branch thereof may only take place through the new fast-track rules on a business transfer, or as a result of an approved and confirmed restructuring proposal. If a sale of the business takes place based on a con - firmed restructuring proposal, the sale can include a statutory forced debtor change so as to include both pledged/mortgaged assets and the underlying financ - ing.

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