Common struggles faced by international creditors in Luxembourg bankruptcy proceedings
A large numbers of international corporate groups conducting their activities all over the world have holding or finance companies in Luxembourg. These businesses as well as creditors face challenges when it comes to bankruptcy proceedings. Here are the key elements to carefully check in such situations.
The present article addresses selected aspects around Luxembourg bankruptcy law which international creditors may encounter and should watch for when seeking to have their debtors declared bankrupt in Luxembourg or, on the contrary, trying to assess the bankruptcy risk when negotiating a distressed investment or a debt restructuring with a group or a structure having its key entities located in Luxembourg.
More particularly, the points addressed here are the following:
- Satisfying the "loss of creditworthiness" criteria;
- Facing oppositions after having had a debtor declared bankrupt;
- Relinquishing control to the trustee;
- Assisting with securing funding to initiate proceedings on the merits; and
- Luxembourg directors' duties in an insolvency context.
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Olivier MarquaisSenior Associate Attorney at law
Olivier Marquais, senior associate, is an attorney-at-law in the Litigation & Risk Management Practice Group of our Luxembourg office. He focuses on financial and asset management disputes (litigation and arbitration).T: +352 466 230 242 E: firstname.lastname@example.org