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ARTICLE · 26 AUGUST 2026

The European Pre-pack: Safeguarding Value Beyond Liquidation

GGI | Global Alliance
GGI | Global Alliance
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The European Union's Directive (EU) 2026/799 introduces the pre-pack procedure to address the longstanding fragmentation of national insolvency laws across Europe, aiming to preserve viable businesses that would otherwise be dismantled due to timing mismatches between corporate crises and market reactions. This two-stage mechanism promises to reduce legal uncertainty and stabilize the EU single market, but raises critical questions about moral hazard, confidentiality, and the corporate governance structures

ItalyInsolvency/Bankruptcy/Re-Structuring
Marco Bartoli (Baldi Prati & Partners)
Marco Bartoli (Baldi Prati & Partners)
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The persistent fragmentation of national insolvency laws across Europe has for years fuelled legal uncertainty, affecting the cost of capital and the stability of the EU single market. Directive (EU) 2026/799 introduces the legal concept of the pre-pack to address a frustration familiar to market participants: seeing viable business entities broken up due to the failure of the insolvency system to synchronise the timing of the crisis with that of a market which withdraws disproportionately quickly at the first sign of insolvency.

A two-stage procedure

The pre-pack procedure consists of a two-stage process. The preparation phase (initiated by the debtor facing probable insolvency) aims to identify a purchaser through a competitive and transparent process supervised by an independent administrator. The liquidation phase follows, during which the competent authority approves the sale within a compressed timeframe (a maximum of three months for any residual auctions), using the

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