Introduction
Preventive measures
Out-of-court reorganisation
In-court reorganisation
Modernisation of bankruptcy
On 19 July 2023, the Luxembourg parliament passed bill no. 6539A on business preservation and modernisation of bankruptcy law, which aims to modernise Luxembourg’s insolvency laws, implementing EU Directive 2019/1023 of the European Parliament and the Council of 20 June 2019 on preventive restructuring frameworks (the 'Business Preservation and Insolvency Modernisation Act' or 'BPIM Act').
The Luxembourg act of 28 October 2022 introducing the procedure of administrative dissolution without liquidation (procédure de dissolution administrative sans liquidation, the "Administrative Dissolution Procedure") (the "Act") has just been published and will enter into force on 1st February 2023.
Background and objective
The purpose of the Act is to dissolve empty shell companies within a short timeframe at reduced costs for the Luxembourg State.
Introduction
General obligation for creditors to file their claims
Nature of claims admissible in bankruptcy
Valuation of declared contingent claims
The Act of 17 December 2021 has extended the transitional measures provided for by the Act of 23 September 2020 until 31 December 2022. In practice, Luxembourg-based companies can hold either virtual board and shareholder meetings, even if their articles of association provide otherwise, or physical meetings if they respect the applicable sanitary conditions.
The Act of 30 June 2021 has extended the possibility for Luxembourg-based companies to hold virtual board and shareholder meetings until 31 December 2021.
Given the present coronavirus outbreak, it is of the utmost importance for lenders and borrowers alike to diagnose correctly the risks and challenges ahead for their business. Indeed, the present crisis is not merely about liquidity but much more about solvency as it will affect the real economy first.
With the spread of the virus, there is an acute risk of financial difficulties leading to default and bankruptcies in sectors most vulnerable to the virus, including maritime and air transport, retail, tourism, insurance and entertainment.
Table of contents
Bankruptcy .............................................................................. 2
Controlled management .......................................................... 2
Moratorium or suspension of payments .................................. 3
Company voluntary arrangement ............................................ 3
Involuntary liquidation.............................................................. 3
Contacts .................................................................................. 4
This week’s TGIF takes a look at the recent case of Mills Oakley (a partnership) v Asset HQ Australia Pty Ltd [2019] VSC 98, where the Supreme Court of Victoria found the statutory presumption of insolvency did not arise as there had not been effective service of a statutory demand due to a typographical error in the postal address.
What happened?