COVID-19 Drives Changes To Judicial Reorganisation Procedures

The COVID-19 crisis has emphasised the importance of having performant insolvency proceedings. As of now, new measures are in force which aim to optimise the judicial reorganisation procedure. We elaborate on the three most relevant changes.

Belgian insolvency law organises two main types of insolvency proceedings: bankruptcy (faillissement/faillite) which is a winding-up proceeding and judicial reorganisation (gerechtelijke reorganisatie/réorganisation judiciaire) which is a safeguard proceeding.

After two consecutive moratoria on bankruptcy (read more here), the latest of which expired on 31 January 2021, the legislator decided to revisit certain of the existing provisions relating to judicial reorganisation: enterprises facing financial hurdles are now offered a new instrument to facilitate their restructuring, the documentation requirements for applying for judicial reorganisation are relaxed and the beneficial tax regime applying to debt reductions