EXPERTISE | GRP and Assistance with the Chambers for Companies in Difficulty (KOIM)

Judicial Reorganization Procedures

Are you self-employed or running a company and experiencing difficulties that threaten the continuity of your business activities? The Belgian Economic Law Code (WER) offers a wide range of solutions, from lighter (e.g., appointment of a mediator) to more severe (Judicial Reorganization Procedure or GRP) measures.

The Judicial Reorganization Procedure and Creditors

This protection for several months provides you with the necessary breathing room to find a structural and sustainable solution in the form of:

• An amicable settlement, being an agreement with one or more creditors

• a collective agreement, being an agreement on a reorganization plan

• a transfer under judicial authority

Whereas an amicable settlement is suitable for companies experiencing difficulties with a limited number of (but significant) creditors, a collective agreement is more likely to be imposed on companies that have accumulated an unmanageable historical debt over the years.

In a transfer under judicial authority, the court appoints a judicial representative who will carry out the transfer. The transfer under judicial authority is primarily used to transfer, whether or not profitable, activities as a going concern. The sale price is used to satisfy the creditors.

On September 1, 2023, the law of June 7, 2023, came into effect. This is a transposition of the European Directive 2019/1023 on preventive restructuring frameworks, debt discharge, and disqualifications.

Due to this legislative change, the collective agreement under GRP has been significantly modified. Henceforth, creditors are classified into “categories,” each of which must approve the agreement, with the new benchmark being the test of the creditors’ interest.

A new figure was also introduced, the “restructuring expert.” They are appointed at the request of the debtor or creditors and can perform various tasks, including mediation, drafting the reorganization plan, and providing advice.

A company can file a petition with the business court for bankruptcy under the newly introduced silent bankruptcy or pre-pack if it believes it is in a state of bankruptcy, preparing the transfer of all or part of its activities to an affiliated company.

If there is a threat to the continuity of your activities, we will determine which of the measures outlined above best fits your company’s profile and whether the conditions for a Judicial Reorganization Procedure are met.

Which solution is best for your specific situation? 

Throughout the entire procedure, we protect your interests regarding your business partners and creditors as well as before the court, and we stand by your side with practical legal advice. Close cooperation between you as an entrepreneur, your accountants, and Vanhoucke Law as your lawyer is essential to bring these complex procedures to a desired conclusion and guide your company to safe harbor.

You are summoned by the Chambers for Companies in Difficulty (KOIM). What now?

The Chamber for Companies in Difficulty at the Business Court was established to detect traders and companies in difficulty. This Business Court chamber collects various data—warning signs—that indicate companies in trouble.

These data include companies that no longer pay their bills of exchange, that have left their social security contributions, VAT, or professional withholding tax unpaid for two quarters, or that have been convicted by default judgments or judgments concerning an undisputed debt. If, after the summons and processing of the file, the judge believes that the conditions for bankruptcy are met (and no GRP procedure has been initiated), the judge may refer the case to the public prosecutor with a view to initiating bankruptcy proceedings.

We will investigate your confidential file at the service for companies in difficulty and specifically the problem at hand.

Subsequently, in consultation with your financial advisors, we provide appropriate legal advice (which steps need to be taken before the appearance, what possibilities exist to ensure the continuity of business activities in the short and long term, or to cease activities in a controlled manner). We prepare the necessary documentation in consultation with your financial advisors for the appearance before the service and guide you throughout the final appearance.

Should you need legal advice and/or assistance, Vanhoucke Law is here to help. Please feel free to contact us. We think with you: in your interest.