Stan Brijs, restructuring and insolvency specialist, was interviewed in Trends, the Belgian business and finance weekly, on the end of the moratorium and the reform of insolvency law in light of the Covid-19 crisis.
On 31 January 2021, the moratorium temporarily protecting fundamentally healthy Belgian companies affected by the Covid-19 measures against inter alia bankruptcy petitions and (certain) enforcement measures came to an end. This means that creditors are once again allowed to petition the courts to have companies that fail to pay their debts declared bankrupt.
Against this backdrop, the Belgian government decided to simplify the judicial reorganisation procedure to better protect healthy companies from their creditors. A judicial reorganisation could be the best option for companies facing temporary difficulties due for example to a government-mandated shutdown. This procedure can lead to a settlement with a few creditors, a collective agreement whereby a majority of creditors approve a recovery plan, or a partial sale of the business.
In the article, Stan points out that a judicial reorganisation must however not serve to pointlessly prolong the life of a company and that it’s best to weed out companies facing financial difficulties that are trying to artificially sustain themselves as they have an adverse effect on the rest of the economy.
The full article is available here (in Dutch).
Source: Trends, 4 February 2021