Contributed by Eric Blomme and Cecile Odeurs.
The COVID-19 pandemic has put the rescue of struggling but viable businesses front of the agenda. The initial response of the Belgian government and legislator was a moratorium on enforcement measures and bankruptcy petitions. Such moratorium can however not be a structural solution in the long term, and expired on 31 January 2021.
The attention then shifted to the improvement of the existing legal framework. Fortunately, Belgium already benefits from a pre-bankruptcy moratorium procedure designed to rescue struggling businesses (the “judicial reorganization”). Although this procedure is well designed, it does suffer one key drawback: its public nature. In light of cultural and other factors, the opening of such public procedure often leads to a loss of confidence from suppliers and customers and triggers further loss of value.
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