The moratorium on forced bankruptcies (filed by a creditor) ended on 31 January 2021 and will not be renewed a third time. In order to preserve the health of Belgian companies as much as possible and to avoid too many bankruptcies being filed at the same time, the government has decided instead to facilitate and streamline the judicial reorganization procedure ("JRP") so that it can proceed more quickly.
This reform, which has not yet been officially approved by the government, will consist of several points:
- Reduction in the number of documents to be provided by the company at the time of application in order to ease the procedure and make it less costly. New changes are also intended to speed up the procedure with the courts, in particular by allowing e-mail exchanges. "According to Paul D'Haeyer, President of the Enterprise Court in Brussels, this new simplicity is an excellent idea because "_the procedure is very cumbersome: in order to be admissible, all documents must be attached to the submitted file. This requires considerable administrative capacity and leads to the automatic exclusion of 90% of SMEs".
- The court will have the possibility to appoint a mediator who can meet and negotiate with the creditors in all discretion, i.e. before publication in the Belgian Official Journal. If an agreement is reached, it will be submitted to the court.
- There will be a tax exemption for creditors on reductions in the value of receivables and, for companies in distress, on the proceeds from debt write-offs. (Source: Télésambre)
- As for the start of this reform, its implementation is planned before the end of February 2021.
What do the players in the sector say about this?
Organizations are divided in their response. Voka understands that the moratorium on bankruptcies can not last forever. "We must do everything possible to ensure that companies that were healthy before the Corona crisis emerges from the crisis unscathed. It can not be the intention to keep zombie companies artificially alive for too long" says Hans Maertens, managing director of Voka. Voka argues for an extension of the moratorium, specifically for the sectors that are currently closed. Hans Maertens: "They cannot make a turnover and therefore have not yet started to get back on their feet". (Source: voka.be) The FEB and Unizo on the other hand plead for an extension of the moratorium on bankruptcies. (Source: VRT Nieuws)
And Spreds' opinion?
According to our legal team, this reform could become a real game-changer and give some companies a second chance. SMEs, which are in great difficulty today, generally don't have the resources to be properly assisted in starting up a judicial reorganisation procedure. The proposed reform resulted in a huge sigh of relief for most companies. Moreover, we expect that the possibility to carry out a mediation in all discretion, without publication in the Belgian Official Journal, will be very beneficial for the success of this procedure. It is, however, regrettable that this new proposed reform did not directly follow the moratorium on bankruptcies.