Latest updates

Will ECJ decision on Belgian insolvency proceedings lead to increased redundancies?
ALTIUS
  • Belgium
  • 24 May 2019

The European Court of Justice recently confirmed that the Belgian reorganisation framework infringes the EU Transfer of Undertakings Directive with regard to the transfer of personnel. This judgment looks set to have a significant impact on reorganisation proceedings, with parties more likely to be reluctant to organise a transfer of assets leading to bankruptcies and redundancies.

Licence to contract – licence agreements and insolvency law
ALTIUS
  • Belgium
  • 19 April 2019

In an insolvency situation, the fate of ongoing contracts is something to be discussed. Such contracts are often closely linked to the essence of a company's business. For example, for (commercial) leases, a lessor's bankruptcy or a tenant's judicial reorganisation will probably result in discussions about the agreement, its (forced) execution and rental payments. If a company's activities are based on patent or software licences, the effect on these agreements will also be of crucial importance.

Is ECJ jurisprudence torpedoing Belgian insolvency law?
ALTIUS
  • Belgium
  • 08 February 2019

The European Court of Justice appears likely to rule that the Belgian reorganisation framework infringes the EU Transfer of Undertakings Directive with regard to the transfer of personnel. If the option to transfer only a portion of staff is no longer available in Belgian reorganisation proceedings, companies will have no choice but to formally file for bankruptcy, which is exactly the issue that the legislature and the labour unions had hoped to avoid when introducing this mechanism into Belgian law.

Effects of bankruptcy on spouses' personal debts
ALTIUS
  • Belgium
  • 07 December 2018

The former Bankruptcy Statute of 1997 included a principle that a natural person could be discharged of their remaining and outstanding debts – a so-called 'waiver' – at the moment of a bankruptcy's closure. The discharge's beneficial effects were extended to the bankrupt person's spouse. However, for bankruptcies that have happened since 1 May 2018, and so fall under the new legal framework, this situation has changed.

Follow-up monitoring of companies in financial difficulty
ALTIUS
  • Belgium
  • 07 September 2018

The legislature recently took steps to improve the follow-up monitoring of companies in financial difficulty and strengthen the fight against inactive companies. To determine whether companies are in financial difficulty, the courts gather information from various (digital) sources. However, the focus remains on preventive mechanisms – namely, identifying companies in financial difficulty and following up with court action.

Personal bankruptcy of company administrators
ALTIUS
  • Belgium
  • 27 July 2018

The Belgian insolvency law's scope was recently broadened. As of 1 May 2018, all entities that are involved in commercial or entrepreneurial activities can be declared bankrupt (or enter into court-supervised reorganisation proceedings). Discussion has started about whether company administrators can also be seen as being 'involved in an entrepreneurial activity' and thus declared bankrupt.

Insolvency goes digital: Regsol and its innovations
ALTIUS
  • Belgium
  • 15 June 2018

The digitisation of different insolvency proceedings (ie, bankruptcies, judicial reorganisations and company voluntary agreements) recently reached a new milestone. All new insolvency files must now be commenced through the Central Solvency Register (Regsol) and followed up on the same system. Regsol offers a number of new features, including the electronic storage of insolvency files and a new declaration of debt form.

Relationship between privileged and secured creditors
ALTIUS
  • Belgium
  • 04 May 2018

If reorganisation proceedings are unsuccessful and lead to bankruptcy proceedings, creditors with new claims resulting from services performed during the reorganisation proceedings often find it difficult to receive payment of their privileged claims when they are in competition with a general pledge on the debtor's estate that is held by a bank. The Supreme Court's recent judgment in this regard will help such privileged creditors to receive payment from the bankrupt estate.

Stricter scrutiny of inactive companies
ALTIUS
  • Belgium
  • 02 February 2018

The legislature recently took steps to improve the follow-up monitoring of companies in financial difficulty and strengthen the fight against inactive companies. Companies that fail to pay their social security or value added tax debts, file their annual accounts or fulfil other administrative obligations on time will now appear on the radar of the Commercial Court's Investigative Services much earlier. The services' recently extended powers of action could lead to unfortunate surprises for some companies.

Administrator liability in bankruptcy framework
ALTIUS
  • Belgium
  • 03 November 2017

Parliament recently voted into law the federal government's proposal to introduce a new chapter on insolvency into the Code of Economic Law. Among other things, the new chapter concerns the potential liability of former directors of a bankrupt company. Some of the new principles already partially existed in Belgian law, but have been amended by the new chapter, which also broadens certain concepts which will thus apply to a wider range of entities.

Reorganisation plan: position of secured creditors
ALTIUS
  • Belgium
  • 21 July 2017

The Business Continuity Act aims to enable debtors in difficulty to continue their activities by restructuring their debts. One of the proceedings that the act introduced is the reorganisation of debt pursuant to a restructuring plan. The restructuring plan may consist of several measures, including the waiver of certain debts. However, none of these measures (with the exception of a temporary stay on the enforcement of claims) may be imposed on secured creditors, unless they expressly agree to it.

Changes to insolvency regime proposed
ALTIUS
  • Belgium
  • 12 May 2017

The government recently undertook steps to modernise and broaden its insolvency legal framework and submitted a proposal to Parliament intended to introduce a new chapter to the Code of Economic Law. The proposal will update the Bankruptcy Act and the Business Continuity Act. The government proposal will be discussed in Parliament in the coming weeks and could be accepted before the summer recess.

Insolvency in franchising relationships
ALTIUS
  • Belgium
  • 17 February 2017

Franchisees are often unable to fulfil their payment obligations. The special cooperative relationship between a franchisor and its franchisee usually leads to negotiations and contractual agreements between the parties regarding the repayment of accumulated debts. However, the franchisee may still become insolvent. A key question is whether showing leniency in the context of insolvency proceedings will be beneficial or detrimental to a franchisor.

Reorganisation proceedings: access and possibilities
ALTIUS
  • Belgium
  • 02 December 2016

The Business Continuity Act of January 31 2009, amended in 2013, provides for specific (court-supervised) restructuring proceedings, during which the company (or debtor) is protected against its creditors' claims so that it can reorganise its business. For debtors, one of the act's major advantages is its 'open-gate' approach. In essence, this approach means that court protection is granted if the company's continuity is threatened and the debtor files a request in this regard.

Reservation of title: legal guidelines and practical tips
ALTIUS
  • Belgium
  • 16 September 2016

Suppliers are often surprised by their customers' insolvency and only at that moment discover that the goods that they delivered are unpaid. Even when a reservation of title has been inserted into the contract, the repossession of goods can be difficult in practice. Measures that can help the recovery process include ensuring that a reservation of title clause is clearly drafted and that each single good is identifiable.

Broadening scope of insolvency legislation
ALTIUS
  • Belgium
  • 01 July 2016

Historically, Belgian insolvency legislation has applied only to entities involved in commercial activities. However, recent jurisprudence and upcoming legislative changes will result in important amendments that are intended to broaden the scope of existing legislation. As a result, entities that are involved in commercial or entrepreneurial activity will be eligible to benefit from bankruptcy legislation.

Bankruptcy figures suggest uphill climb for struggling companies
  • Belgium
  • 17 September 2010

Positive results for the industrial sector and among cooperative companies are the exception in the statistics on bankruptcies in Belgium in the second quarter of 2010. The effects of the economic downturn continue to be particularly strongly felt in certain areas, with the number of declarations of bankruptcy among construction sector companies rising by over one-fifth in comparison with the same period in 2009.

Controversial ruling on judicial reorganization leaves pledges less secure
  • Belgium
  • 05 February 2010

The president of the Brussels Commercial Court has ruled that in the context of a company's judicial reorganization, a creditor that holds a cash-flow pledge cannot obtain collateral security on that basis. This contradicts legislation that guarantees the right to realize a pledge, even if insolvency proceedings have begun.

New Restructuring Rules Provide M&A Opportunities
  • Belgium
  • 13 November 2009

The Law on Business Continuity favours divestments, as companies in difficulty are better protected against their creditors. However, it also gives competitors the conditional right to trigger a court-supervised reorganization by mandatory transfer of a near-bankrupt company's assets. The planned winding-up of car manufacturer Opel's Belgian production plant promises to test the operation of the law in an international context.

Procedure for Reorganization of Companies in Difficulty is Revamped
  • Belgium
  • 24 April 2009

The new Law on Business Continuity makes fundamental changes to the Belgian legislation on company reorganization (similar to Chapter 11 proceedings in the United States). The process has been simplified and streamlined, with the aim of creating conditions that favour saving the company as a going concern.