Denmark: A Restructuring/Insolvency Overview
Market Overview
Denmark experienced a moderate but positive growth in its gross domestic product (GDP) in 2025 following a particularly strong year in 2024. Real GDP slowed from approximately 3.5% in 2024 to 2.9% in 2025 with quarterly growth remaining positive but subdued toward year-end.
Economic growth in 2025 was uneven across sectors and was largely driven by growth in the pharmaceutical industry, which exerted a downward drag on aggregate growth in the last quarter of 2025.
Financing conditions eased materially during 2025. Under Denmark’s fixed exchange-rate regime, the Central Bank of Denmark broadly followed the ECB’s easing cycle. By early 2026, the Central Bank of Denmark’s interest rate stood at approximately 1.6-1.75% compared with materially higher and restrictive levels during 2023 and 2024.
The Danish labor market remained resilient throughout 2025. Employment levels stayed high, and unemployment increased only modestly towards early 2026. The unemployment rate is expected to slightly rise in 2026. From an insolvency perspective, this indicates that bankruptcies in 2025 were not labor market-driven but primarily linked to financing structures and sector-specific demand.
Renewed tensions between USA and EU in 2025 – including higher US tariffs on steel, aluminum and selected industrial products – had a measurable impact on export-oriented European economies. The Central Bank of Denmark identified higher tariffs and weaker global trade as a factor behind the downward revision of the Danish GDP-growth in 2025. Initially, 70% of the Danish industry was expected to be affected by the tariff uncertainty. Most of the industry was, however, not as affected as initially forecasted.
In early 2026, the escalation of the Middle East conflict and the closure of the Strait of Hormuz introduced a new and significant risk, primarily affecting the energy supply. The International Energy Agency (IEA) has described the disruption as the largest oil supply shock in modern history, with tanker flows reduced to near zero and oil production curtailed by approximately 10 million barrels per day at peak.
As a result, Brent crude prices rose sharply above USD 100 per barrel, briefly rising above USD 110 per barrel, before partially easing following coordinated releases from strategic petroleum reserves. In comparison, Brent crude prices were approximately USD 75 per barrel when entering 2025 and approximately USD 60 per barrel towards the end of the year. The IEA has warned that a prolonged disruption would feed through inflation and economic growth in energy-importing economies, including Northern Europe.
From a Danish insolvency perspective, these developments do not yet constitute a systemic shock. However, transport, logistics, aviation and energy-intensive manufacturing remain particularly exposed if elevated energy prices persist or re-emerge. This heightened exposure increases sector-specific vulnerability and may result in a higher incidence of bankruptcies within these industries.
Bankruptcy trends
Statistics Denmark’s annual data on bankruptcies in active enterprises (companies with employees and/or turnover exceeding DKK1 million in the previous four quarters) show the following development: (i) 2,375 bankruptcies in 2025, (ii) 2,491 in 2024, and (iii) 3,078 in 2023.
This represents a decline of approximately 4.6% in 2025 compared to 2024. Compared to 2023, the total number of bankruptcies in active enterprises has declined by approximately 22.8%. Compared to the past 10 years, the 2025 bankruptcy level is average, indicating a continued stability in new insolvency cases compared to the previous 10 years.
Continued uncertainty in the green energy sector
The Danish green energy sector has long been regarded as a flagship of technological innovation and climate ambition. In light of increasing volatility and renewed vulnerability in Brent crude oil prices, the strategic importance of the transition toward renewable energy has once again been underscored.
Notwithstanding this relevance, the sector has recently encountered substantial structural and financial challenges. These difficulties have materialized in a number of high‑profile insolvency and restructuring proceedings involving large Danish green energy enterprises, signaling mounting pressure across the industry.
Although financing conditions in general eased in 2025, the cumulative effects of earlier inflationary pressures and successive interest rate hikes have had a lasting impact on investment decision‑making within the sector.
Investors have adopted a more cautious lending approach, which has directly constrained the development and execution of green energy projects. This prudence has been reinforced by continued supply chain disruptions, which have increased both the cost and unpredictability of project financing, thereby contributing to a more restrained investment environment.
In 2025, Danish wind and solar installations generated a combined 23.6 TWh of electricity, representing a modest decline relative to the historically high output of 24.3 TWh recorded in 2024. The decrease is partly attributable to less favorable wind conditions during the year. At the same time, the pace of electrification has failed to maintain momentum, necessitating continued reliance on fossil fuels during peak demand periods.
This imbalance is, in part, the result of slower‑than‑anticipated progress in indirect electrification technologies, including hydrogen and e‑fuels, which were expected to drive increased electricity demand. Concurrently, the rapid expansion of solar photovoltaic (PV) capacity has generated pronounced market distortions. Solar output has frequently peaked even during periods of negative electricity prices, exacerbating price volatility and fundamentally altering traditional intraday price patterns.
Whereas electricity prices historically peaked around midday, they now tend to reach their lowest levels during periods of maximum solar generation. Comparable dynamics are observed during particularly windy conditions.
As a consequence, south‑facing PV installations have proven less economically valuable than initially anticipated at the planning and construction stages. This development has intensified the need for battery energy storage systems (BESS) to stabilize grid connections and absorb excess renewable production. However, the combination of pronounced energy price volatility and increasingly complex regulatory requirements has challenged the predictability of green energy investments.
When coupled with rising geopolitical uncertainty, the developments in the green energy sector may weaken political and governmental willingness to prioritize the rapid rollout of green transition initiatives. Instead, there may be a growing risk that policy focus shifts toward short‑term measures aimed at safeguarding the competitiveness of Danish (and European) industries.
From an insolvency and restructuring perspective, this evolving landscape underscores the heightened vulnerability of the green energy sector and the increasing likelihood of further financial distress among market participants.
Amendments to the Danish Bankruptcy Act
With effect from 1 January 2026, a new bill was introduces tightening the rules on appointment of bankruptcy and reconstruction trustees. The reform is based on recommendations issued by the Danish Bankruptcy Council in March 2025 and were triggered by concerns about potential misuse of the insolvency system identified through the media, which exposed potential structural weaknesses in existing rules on the appointment of trustees.
Key changes include that appointment of trustees will primarily be based on claim weighted creditor support at the decree hearing, restrictions on voting rights of related parties, management and employees, and extended disqualification periods for trustees, who have acted as advisors or held positions closely connected to the debtors prior insolvency.