Context

Ongoing innovation of the Belgian insolvency law : change of the current law and a new proposal for a European bankruptcy Directive !

Insolvency law in Belgium will be subject to a lot of change, through the transposition of two consecutive directives of the European Union and the implementation of the case law of the European Court of Justice. The first changes in the law are imminent. The main tendencies of the upcoming evolution are explained in the contribution below.

How the Belgian Cour de Cassation qualifies a director of a company as an “enterprise”

Since the entry into force of the new Belgian Code of Economic Law (‘BCEL’) it is possible for a company director, in its personal capacity, to be qualified as an “enterprise” and consequently to be declared bankrupt.

The definition of an enterprise is set out in Article I.1, 1° BCEL and relates to the following organisations:

a) any natural person who independently performs a professional activity;

When a company faces financial distress, concessions are to be made and decisions to be taken in view of its turnaround. In the ordinary course of business, the shareholders bear the entrepreneurial risks and have the ultimate decision-making power. In judicial reorganisation proceedings, the risk and also the decision-making power, is shifted to the creditors as they are the ones having to make the efforts and concessions.