Belgian government imposes temporary statutory moratorium on creditors’ rights
Belgium has already taken numerous measures to mitigate the economic impact of the coronavirus (COVID-19). The federal government has now also decided temporarily to protect debtors affected by the coronavirus crisis from creditors by imposing a stay on creditors’ right of creditors to enforce debts, terminate or dissolve existing agreements early and initiate bankruptcy proceedings.
UPDATED 14 MAY 2020
The specific measures were taken by the federal government in a Royal Decree No 15 dated 24 April 2020 (the Royal Decree). This enacts a statutory moratorium from 24 April 2020 to (and including) 17 June 2020 pursuant to which:
- a business affected by the coronavirus crisis cannot be declared bankrupt or, if it is a legal entity, be dissolved by a court or a transfer of the whole or part of its activities being forced, unless (i) on the initiative of the public prosecution or a temporary director (voorlopig bewindvoerder/administrateur provisoire), or (ii) with the business’ consent;
- no protective or executory attachment may be granted, and no means of enforcement, including enforcement of security interests, may be taken or continued on certain assets of the business;
- agreements concluded by the business before 24 April 2020 cannot be dissolved unilaterally or by the courts on the grounds of non-payment of a monetary debt due and payable under the agreement. An exception is made for employment contracts; and
- payment periods included in a homologated judicial reorganisation plan approved before or after 24 April 2020, are extended by the duration of the suspension with a corresponding extension of the maximum period of five years for the implementation of the reorganisation plan.
By taking these measures, the Belgian federal government sends a strong message to the Belgian business community, providing additional breathing space for businesses in difficulties related to the coronavirus crisis and discouraging creditors from taking aggressive action against their debtors during the crisis.
The above measures will end automatically at 11:59 pm on 17 June 2020, unless further extended by the federal government.
Below are a number of questions and answers relating to the Royal Decree which look at some specific aspects in detail.
Marc VermylenManaging Partner Belgium Attorney at Law
Marc Vermylen is Managing Partner of Loyens & Loeff Brussels. He is a member of Loyens & Loeff’s Banking & Finance Practice Group and heads the global Projects Team at Loyens & Loeff. He is recognised worldwide as an expert and influential lawyer in banking law and finance law.T: +32 2 743 43 15 M: +32 475 52 31 66 E: [email protected]
Koen PanisPartner Attorney at law
Koen Panis is a partner in our Brussels office where he is a member of the Banking & Finance Practice Group, the Energy Team and the Real Estate Team. He specialises in international and local finance transactions.T: +32 2 773 23 90 M: +32 497 53 38 36 E: [email protected]
Vanessa MarquettePartner Attorney at Law
Vanessa Marquette, attorney at law, is a partner in the Banking and Finance Practice Group of our Brussels office and a member of the firmwide Restructuring & Insolvency team. She is recognized for her expertise in Banking and Finance with a focus on international finance law, regulated financial services, sustainable finance and banking litigation.T: +32 2 773 23 25 E: [email protected]
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