Firms' value distribution in restructuring procedures: s US/EU law comparative perspective

The article addresses the issue of value distribution among different stakeholders in procedures aimed at restructuring distressed firms, adopting a comparative perspective. In particular, it examines the approaches taken on this point in the American legal system and in various European countries, in the context of implementing Directive (EU) 2019/1023 (the "Restructuring Directive"). The comparative analysis highlights that all the legal systems considered uphold the principle that no dissenting party should be worse off under the restructuring plan than they would be in an alternative scenario—typically, the liquidation of the firm—should the plan not be confirmed (the "no creditor worse off" rule). The challenge, however, lies in practice: establishing the value of the alternative scenario is far from straightforward, as it is largely a theoretical exercise. It is also costly. Consequently, placing the burden of proof on the party concerned may jeopardize the effectiveness of this protective mechanism. The analysis further reveals that the assessment of compliance with the priority rule concerning the surplus value (i.e., the value exceeding that of the alternative scenario) is consistently conducted at the stage of cross-class cram-down, rather than at the point of admission to the procedure. This choice is driven by the need for flexibility. The priority rule also guarantees a minimum level of treatment that is not an individual entitlement but rather a class-based right. Regarding the selection among different priority regimes, all the legal systems analysed—regardless of the restructuring model adopted—converge on the necessity of allowing some departure from the strict Absolute Priority Rule (APR), at least in specific cases and under defined conditions. The central issue, then, becomes identifying when, by what means, and to what extent such deviations should be permitted. While there is no universally accepted answer, the article argues that any assessment must take into account the specific characteristics of the socio-economic context—such as whether large enterprises or small and medium-sized enterprises predominate—as well as the broader regulatory environment.