You are here:
04 May 2018 / news

Reform of Belgian insolvency law as of 1 May

As from 1 May 2018, a comprehensive reform of the Belgian insolvency framework entered into force. The old framework consisted of two separate laws governing respectively bankruptcy and judicial reorganization. The new legal framework incorporates both regimes in Book XX of the Belgian Code of Economic Law.

Reform of Belgian insolvency law as from 1 May

Innovations

One of the most important innovations is the expansion of the scope of the insolvency regime. Previously the scope of bankruptcy proceedings was limited to commercial entities. The scope has now been expanded to include any “enterprise” (subject to limited exceptions). This means that entities that were exempted under the old regime because of their “civil” character, such as the professions, VZW/ASBL, certain entities without legal personality etc. can now be made subject to insolvency proceedings.

Other important reforms include: 

  • modernizing of the proceedings, making them largely electronic
  • improvement of the legal status of an amicable agreement outside formal insolvency proceedings
  • introducing a coherent set of rules regarding director liability

Debtor in possession

One other noteworthy amendment is the protection awarded by the new insolvency regime to security interests granted during a judicial reorganization procedure. Under the old law there was some doubt whether security granted during a judicial reorganization procedure was enforceable against the trustee in subsequent bankruptcy proceedings, in particular in cases where new security was being granted for existing debt which was automatically declared unenforceable. A new provision now affords explicit protection for such security, aiming to improve debtor in possession financings.

 

Overall, we expect the reforms to be welcomed by Belgian insolvency practice as the new regime is a set of coherent rules that is in line with recent international trends. For further information, please contact the members of our Banking & Finance or Restructuring & Insolvency teams.



Belgian team collecting the award for 'Best Law Firm of the Year' during the Trends Legal Awards 2019

Loyens & Loeff Belgium wins two awards during Trends Legal Awards

We are delighted to announce that we have won not only the ‘Best Law Firm of the Year’ award, but also the award for 'Best Law Firm in Tax Law' from Trends Legal... read more
Tax Alert May 2018

The road towards sustainable finance: stay on track

The term ‘sustainability’ has outgrown its status of being a mere buzzword. Climate change has given the starting signal of a relay race in which the United... read more
Beware of ransomware protect your undertaking from a legal risk management perspective

PSDII: migration to SCA by 31 December 2020

On 16 October 2019, the European Banking Authority (EBA) issued an Opinion concerning one of the most important features of the Payment Services Directive II... read more
Stay informed

Don't miss out. Stay up to date about our latest news and events.

Stay informed