In September 2022, a new law will reform the law of companies in difficulty. This law will perpetuate several measures put in place during the Covid-19 pandemic. They will affect the majority of collective proceedings : backup, recovery and judicial liquidation. These new rules will not come into force until October 1, 2022. For procedures prior to this date, the old provisions remain applicable.
An ordinance in September 2022 will reform the company law in difficulty. It will retain measures taken during the Covid health crisis. These provisions will affect most collective proceedings : backup, recovery and judicial liquidation. The new rules will enter into force from October 1, 2022. For procedures opened before this date, the old provisions apply.
In September 2022, a reform of the company law in difficulty will be put in place. This law will maintain measures introduced during the Covid-19 pandemic. These measures will apply to the majority of collective proceedings : backup, recovery and judicial liquidation. These new principles will be effective as of October 1, 2022. For procedures prior to this date, the old provisions apply.
The initiation of the backup procedure is marked by an observation period of 6 months. This is used to draw up an economic and social balance sheet, and to analyze the company's chances of recovery. The head of the company retains his functions.
Until September 30, 2022, a renewal of an additional 6 months of the observation phase was possible at the request of the Prosecutor. The observation period thus extended could extend up to 18 months.
The safeguard procedures opened since October 1, 2022 can only include one renewal of the observation phase, for a maximum duration of 6 months. It is no longer possible to request an additional extension. Consequently, the observation period cannot exceed 12 months.
In addition, the possibility of exceptional extension, at the request of the Public Prosecutor, remains applicable to the proceedings of legal redress. In this case observation time can reach 18 months.
Previously, the backup procedure could span 3 months from the date of the opening judgment. But now, for procedures opened from October 1, 2022, the period is limited to 2 months. A prorogation 2 additional months is possible at the request of the company or the legal administrator, which will make a total of 4 months for a safeguard procedure.
If significant changes are made to theexecution of debts of a judicial safeguard or restructuring plan, the court clerk sends a registered letter with acknowledgment of receipt to the creditors. They then have 15 days to share their comments to the planning commissioner.
This period increases to 21 days for safeguard/restructuring plans opened since October 1, 2022. In addition, in the event of lack of response within the time limit, this is worth implied consent proposed measures. However, this rule does not apply to debt forgiveness or debt-to-equity conversion transactions.
Currently, a company in the process of mediation can request a immediate implementation of the accelerated safeguard procedure if it fails to reach an agreement with its creditors. However, it must meet one of the following criteria:
From October 1, 2022, the thresholds are no longer relevant. Any company that does not reach a consensus within the framework of the mediation procedure can request an accelerated safeguard. In addition, its accounts must be certified by a auditor or established by a accountant.
La simplified judicial liquidation procedure provides the opportunity to shut down a high-speed business. Only companies whose rescue is deemed impossible can benefit from it. They must not have real estate in their name and must not employ more than 5 employees and achieve a turnover equal to or less than €750.
Since October 1, 2022, the thresholds (number of employees and amount of turnover) no longer apply only with regard to theFreelance. However, the latter must not have real estate in the company's assets.
Anyone who provides funds to a company in safeguard or recovery procedure benefits from a priority refund of his credit. However, this is placed after super-privileged claims (such as wage claims).
Furthermore, suppliers cannot be forced into payment deadlines or cancellation of debts. Cash contributions made as part of a capital increase cannot benefit from this regime.
Below are the other provisions that will apply on October 1, 2022:
For more information on closing a business:
The new rules aim to modernize collective procedures and better protect the interests of businesses and consumers.
The new rules come into effect on October 1, 2021.
The aim of the new rules is to modernize insolvency proceedings and better protect the interests of businesses and consumers.
