E-flash: “New insolvency moratorium until 31 January 2021”
On 24 December 2020, a new automatic moratorium came into force. This moratorium protects Belgian companies facing payment difficulties as a result of the corona-measures.
By the law of 20 December 2020, the Belgian legislator has taken various temporary, but also structural measures in the area of Justice. Besides a temporary insolvency moratorium, amongst other, the rules on notarial powers of attorney for notaries were extended until 31 March 2021 and even amendments to the Company Code were decided on.
An insolvency moratorium was already announced following the first lockdown in the spring of 2020, but this protection came to an end in June 2020 (see our e-zine of 28 April 2020 and e-flash of 15 May 2020). The new "lockdown light" measures taken by M.D. of 28 October 2020 (modified by M.D. of 1 November 2020) have led the Belgian legislator to reintroduce protective measures for the economic activity of the affected sectors.
The scope of this new cease-fire is largely the same as the previous moratorium, in particular:
- Creditors cannot bring a claim for bankruptcy, judicial dissolution and/or judicial restructuring with court-supervised transfer against the affected companies. The obligation to file for bankruptcy, which rests on the management of a company, is also suspended;
- Creditors cannot make conservatory attachment or attachment for sale of movable property (attachment of immovable property and vessels remains possible);
- The payment terms of a pre-approved reorganisation plan are suspended for the entire period of the moratorium;
- Contract (with the exception of employment contracts) cannot be dissolved unilaterally due to non-payment.
An important difference with the old insolvency moratorium, however, is that this time only the companies directly affected by the new measures promulgated by M.D. of 28 October 2020 (amended by M.D. of 1 November 2020) can benefit from the moratorium. In concrete terms, this means that only the companies that were obliged to close down fall within the scope of application.
The financial difficulties must – as under the old moratorium – be the result of the corona-measures, meaning the company may not already have been in a state of cessation of payment on 18 March 2020. This new moratorium also again provides the possibility for the court to lift the automatic protection, e.g. at the request of a creditor.
Finally, there is an additional protection for private individuals (e.g. a ban on transfer of earnings and attachment for sale of the residence).
The new insolvency moratorium applies until 31 January 2021, but can be extended.