O’Melveny Worldwide

Journal of Bankruptcy Law: Don’t Open Till Doomsday: FDI Screening in the EU—A Cure for a Covid-19-Struck Economy?

August 18, 2020


O’Melveny of counsel Christian Peeters authored this Journal of Bankruptcy Law article on foreign direct investment screening in the EU and the challenges the Covid-19 crisis presents.

“The European Commission (‘EC’) is encouraging EU Member States to make ‘full use’ of their foreign direct investment (‘FDI’) screening tools to protect the ‘EU’s capacity to cover the health needs of its citizens,’” Peeters writes. “The move comes in response to the emerging economic crisis triggered by the Covid-19 pandemic as companies across the continent have gone into lockdown and workers have been sent home. In the face of sharply declining revenues and plummeting stock prices, companies great and small, from a wide range of sectors, are struggling to access funding to cover on-going costs. This perfect storm threatens to push thousands of enterprises into bankruptcy or to make them vulnerable to ‘predatory’ acquisitions. While the EC has so far approved about EUR 2 trillion in state aid to stave off bankruptcies, Europe is also determined to fend off the vultures that are already circling their easy prey. Yet, questions remain about the best remedy for the observed ailment and the side effects that must be avoided.”

Read the full article here.