The following Restructuring & Insolvency guidance note Produced in partnership with Gorrissen Federspiel provides comprehensive and up to date legal information covering:
Bankruptcies and restructurings (reorganisations) are governed by the Danish Bankruptcy Act (Konkursloven), which provides for the following regimes:
rescheduling of debt (gældssanering)
The restructuring and bankruptcy regime is available to insolvent individuals as well as legal entities (companies), whereas the rescheduling of debt regime is only available to individuals.
Pursuant to the Danish Bankruptcy Act, a debtor is insolvent when it is unable to meet its liabilities as and when they fall due, unless such inability must be deemed to be only temporary. The final decision is based on an assessment of the debtor’s liquidity (a cash flow test). The fact that the debtor’s liabilities exceed its assets is not generally of importance.
Apart from the insolvency regimes available under the Danish Bankruptcy Act, an insolvent debtor may advance a proposal for a voluntary composition. Such composition constitutes an agreement between the debtor and the creditors comprised by the proposal and is governed by general rules of contract law.
Moreover, the Danish Companies Act (Selskabsloven) provides for voluntary winding-up (likvidation) of companies (not individuals). However, these rules are applicable only if the company in question is solvent. If the company is insolvent, winding-up of the company
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