One could say that insolvency law deals in paradoxes. This branch of the law is subdivided into two major branches, liquidation and reorganization.
Liquidation deals with the discontinuity of an enterprise and the compensation of the creditor, reorganization of the continuity of the enterprise, or at least the continuity of her economical activity.
If the merchant (i.e. enterprise-company / natural person) ceases payment, he or she is technically obligated to notify the office of the qualified court within a period of one month. It can even lead to punitive measures when a petition in bankruptcy is filed to late.
Law Office RvB & Partners offers assistance with the actions preceding bankruptcy as well as further contacts with the trustee appointed by the court upon bankruptcy.
Firstly, we consider a defence against unsubstantiated bankruptcy claim by request of the public prosecutor’s department or by request of the creditor. It is always up for debate whether or not the conditions of bankruptcy have been met. When the enterprise is proclaimed bankrupt in absentia, a special objection period applies!
As entrepreneur / manager you may have to defend yourself against the trustee’s request to set back the date on which to stop payment, be it against a request on grounds of managerial liability / founder’s liability or, as a shareholder, against a request to release capital...
You may want to take advantage of the possibility to have oneself declared excusable as a natural person and need to submit a request to that end. If you, as a natural person, have personally guaranteed gratuitous surety for the bankrupt you may also want to have yourself declared discharged as surety.
Several specific formalities and subsequent questions necessitate specialized knowledge and assistance.
The question of whether or not the company can opt for placement in liquidation after the conditions of bankruptcy have been met is usually answered negatively, the typical argument being that bankruptcy law is of the public order and that is therefore unacceptable to avert bankruptcy when it becomes apparent that payment has stopped prior to the placement in liquidation.
This does not change the fact, however, that the court can opt for a placement in liquidation as an alternative to bankruptcy in certain cases accepted by the law.
But the fraudulent placement in liquidation of a company and abandoning it with considerable debt whereby (certain) creditors will be put at a disadvantage, is punishable by law.
Consult Law Office RvB & Partners to find out what is legal and what is not and do it in time...
The act of 31 January 2009 on the continuity of enterprises ("WCO" / "LCE") thoroughly revised the regulations that applied to the judicial composition proceedings.
The goal of the WCO/LCE is durable development and healing of the enterprise. The conditions on which it is possible to be granted a reorganization, have been made more flexible by the WCO/LCE. The WCO/LCE has also broadened the number of possible tools that can be used to alleviate a troubled company.
Law Office RvB & Partners are happy to deduce whether or not these new regulations apply to your enterprise, and if possible, what course of action is most advisable.
For instance an extra-judicial reorganisation procedure involving:
- the appointment of an assisting mediator at the request of the entrepreneur
- the appointment of a court mandator at the request of any interested party in the event that manifest and gross shortcomings of the debtor jeopardise the continuity of the undertaking.
A debtor can also propose an amicable settlement with one or more creditors within the framework of an extra-judicial reorganization. All of the involved parties can freely determine the contents of this settlement, to which third parties are not tied. An amicable settlement can only be entered into on the condition that its sole purpose is to heal the financial situation or the reorganisation of the undertaking. Only then will the settlement and the payments be considered opposable to the creditor’s assets.
However, one can only enter into such settlements under certain conditions, filing the settlement arrangements with the court is one of them.
If reparation turns out to be impossible, the debtor has to file a request with the court which starts up the procedural phase within the WCO and immediately leads to the appointment of a delegated judge. In this phase the debtor is no longer forced to choose between judicial composition proceedings and bankruptcy. He now had the advantage of several other possibilities to save his undertaking (judicial reorganisation through amicable settlement, through a collective agreement or through transfer under judicial supervision) and is protected by the period of suspension.
In addition, it is allowed to switch from one possibility to another during the course of the proceedings. Law Office RvB & Partners will be glad to provide you with additional information during your first consult.
When times get tough, Law Office RvB & Partners is at your side!