Le droit de la faillite au Grand-Duché de Luxembourg est actuellement régi par les articles 437 et suivants du Code de Commerce et s’inspire en grande partie du droit et de la jurisprudence belges. La législation applicable en matière de faillite n’a cependant que très peu évolué depuis 1935. Le législateur luxembourgeois, au vu du nombre croissant de faillites prononcées ces dernières années, avait d’ores et déjà tenté de réformer ce droit par l’introduction d’un projet de loi en 2003, resté cependant lettre morte.

INTRODUCTION

Luxembourg is one of the leading domiciles worldwide for international investment vehicles. This leading position has arisen from the combination of the following core factors:

RESTRUCTURING - COURT PROCEDURES

Formal, court-driven restructuring proceedings are available into Luxembourg law, but for practical reasons, these are rarely used in practice.

Reprieve from payment procedure (sursis de paiement)

Usual Luxembourg security package

Luxembourg is one of the leading domiciles worldwide for international investment portfolio acquisition vehicles.

Acquisition financing are usually secured against the assets and cash flows of the target company as well as of the buyout vehicle.

In practice, given that a Luxembourg holding company generally does not have any operational activities, shares, receivables and cash on bank are the most important assets to cover.

The number of companies declared bankrupt in Luxembourg has increased tremendously since 2009, reaching a record number of 1,026 in 2012. According to the Luxembourg authorities, this situation is mainly due to the current legislation, which is obsolete and no longer suited to modern financial difficulties.

In 2009, the Luxembourg government decided that the creation of appropriate tools for companies in financial distress was extremely important, especially in the post-crisis period, and decided to tackle this subject.

Introduction
Objectives
Guiding principles
Main changes
Status

Introduction

On 11 June 2013, the Luxembourg Chamber of Deputies voted in favour of a law introducing a right to claim back "intangible" and non-fungible movable assets from a bankrupt company (the parliamentary file can be downloaded

Le Luxembourg souhaite se doter de nouvelles procédures d’insolvabilité en raison d’une augmentation constante du nombre de faillites qui a désormais atteint un niveau record en dépassant le millier de faillites depuis 2012. Le gouvernement considère qu’en période de crise la mise en place d’un système approprié en matière d’entreprises en difficulté devient primordiale pour prévenir au mieux la faillite.

Introduction
Separable assets
Exercising data recovery right
Other applications
Comment

Introduction

When doing business with a Luxembourg company in financial distress, the counterpart should be aware that certain transactions are at risk.

Doing business with a bankrupt Luxembourg company

A bankrupt Luxembourg company is automatically deprived from the administration of its assets. All transactions must be entered into by the receiver in bankruptcy acting in the name and on behalf of the bankrupt company.