On 13 July 2017 parliament voted to introduce book XX "Insolvency of Companies" in the Code of Economic Law.
In a previous article we already wrote that the insolvency law would be adapted to current national and international regulations and case law and would be incorporated into the Code of Economic Law as a coherent whole.
In this way, solvency procedures must be more transparent, efficient and effective.
The main changes are:
- the extension of the scope of the insolvency law (to the liberal professions, farmers, non-profit organisations, partnerships, foundations and civil law companies having a commercial form as well as the entities under the form of a foreign company without legal personality participating as such in the legal trade world, such as a "trust");
- the implementation of a fully electronic procedure;
- the introduction of a new player, the "enterprise mediator", who will intervene in cases where an enterprise considers that its designation can be useful in the context of an amicable restructuring;
- the informal settlement procedure outside the judicial sphere that has been rendered more attractive, while remaining still possible to have the Courts’ approval of this settlement, if necessary;
- A procedure of full waiver of debts, which makes it easier to take a new start without having to wait for the closing of the bankruptcy;
- the international dimension of the insolvency procedure, which has been highlighted.
As we mentioned in an earlier article, the "silent" bankruptcy or pre-pack is not included in this law. The introduction of this "silent bankruptcy" was meant to increase the chances of a quick settlement of the bankruptcy and a higher return for creditors. However, several stakeholders had expressed their concern that this system could be abused and in addition, on 22 June 2017, the European Court of Justice rendered a judgement that undermines the prepack system in a large part.
The new legislation will enter into force on 1 May 2018.