At the present time, insolvency law rests on two important pillars.
The legislator wishes that difficulties within companies should be dealt with quickly in order to rescue as much of the economic activity as possible, and provides a specific legal framework for this. Efforts are made to detect difficulties at an early stage, and instruments and procedures are provided in order to remedy companies or activities and get them out of difficulty. Within a procedure of judicial reorganisation, efforts can be made to reach an amicable settlement or a collective agreement (recovery plan or reorganisation plan) or a transfer under judicial supervision can be sought.
Companies which cannot pay their debts in the long term and have failed irretrievably are removed from business activities by being declared bankrupt.
In the past these two situations were regulated by different laws (the Bankruptcy Act on the one hand and, on the other hand under a judicial composition, later the Law on the Continuity of Enterprises).
Since 1 May 2018, both of these aspects are regulated under a single law, which is Book XX “The Insolvency of Enterprises” in the Code of Economic Law.
Practical experience shows that there is also a third pillar. Companies in difficulty regularly opt for winding up and liquidation, in accordance with the procedures provided for under company law (insolvent liquidation). If the liquidation takes place without following the company-law dissolution procedure, it concerns a de facto liquidation.
Our firm has a high degree of experience in insolvency law, and we often (but not exclusively) act for the creditors of companies in difficulty.
From this practical experience, we also have a thorough knowledge of the law on securities (law on pledges, mortgage law, law on financial securities, personal securities, etc.).
Thanks to our extensive knowledge on this subject, and of the sensibilities at play among the different stakeholders and our wide experience, we are also competent advisors and supporters for companies in difficulty. Our knowledge of company law and the pitfalls that may threaten the directors of companies in difficulty (liability) represents a further added value.