Judicial reorganization procedures

Are you self-employed or a company director and is the continuity of your activities at risk?
The Belgian Code of Economic Law (WER) provides several options to support companies in difficulty. These range from lighter measures (such as the appointment of a mediator) to more far-reaching interventions (such as the judicial reorganization procedure or GRP).

What options does a judicial reorganization offer? 

A judicial reorganization procedure grants you protection from creditors for several months. This breathing space can be used to develop a sustainable solution in the form of:

• Amicable settlement: an agreement with one or more creditors.
• Collective agreement: a reorganization plan submitted to all creditors.
• Transfer under judicial supervision: a transfer of (part of) the business under the supervision of a court-appointed trustee.

An amicable settlement is particularly useful when an arrangement needs to be made with only a limited number of (but crucial) creditors. A collective agreement is appropriate for companies that need to restructure significant debt. In a transfer under judicial supervision, the court appoints a trustee to organize a going concern transfer. The proceeds benefit the creditors.

Act of 7 June 2023: Important changes

Since 1 September 2023, the European Restructuring Directive (2019/1023) has been implemented into Belgian law. The key changes include:

• Classification of creditors: in a collective agreement, creditors must now be divided into categories. Each category must approve the plan, with assessment based on the creditors’ interests.
• Restructuring expert: the court may, at the request of the company or creditors, appoint an expert to mediate, advise, or assist in drafting the reorganization plan.‍
• Pre-pack or prepared bankruptcy: companies that consider themselves insolvent may request temporary protection from the court to prepare a transfer of (part of) the business. This is done discreetly and under supervision, followed by a controlled transition to another company.

Chamber for Companies in Difficulty (KOIM)

The Business Court also has a Chamber for Companies in Difficulty (KOIM). This chamber collects warning signals (“red flags”) about companies that, for example:

• fail to pay social contributions, VAT, or withholding tax for two consecutive quarters,
• leave bills of exchange unpaid, or
• are convicted by default judgments for undisputed debts.

The KOIM may summon entrepreneurs to explain their situation. If the court finds that the conditions for bankruptcy are met and no reorganization is in progress, it may refer the case to the public prosecutor.

How can we help you? 

Together with you and your financial advisors, Vanhoucke Lawyers examines which path best suits your business:

• restructuring via amicable or collective settlement,
• transfer of activities, or
• controlled closure via bankruptcy or pre-pack.

We analyze the confidential KOIM file, advise on timely steps, prepare the necessary documentation, and guide you during hearings.

Our approach combines legal expertise with close cooperation between entrepreneur, accountant, and lawyer. In this way, we ensure not only that you navigate the procedure, but also that you reach a sustainable solution for the future.

Feel free to contact us for advice or guidance. We think alongside you—in your best interest.