The principles outlined in the European Commission's proposal for a Directive harmonising certain aspects of insolvency law is not expected to lead to extensive reform of Belgian rules since Belgian law already provides a clear set of rules that give creditors and trustees instruments to avoid contestable acts in the context of bankruptcy, which, in some cases, go further than the principles set out in this Proposal.

On the 2 August 2021 Treasury released a consultation paper titled ‘Helping Companies Restructure by Improving Schemes of Arrangement. The consultation is aimed at reforming Australia’s scheme of arrangement procedure.

As requested by practitioners for several months, the legislator has finally amended the Belgian Code of Economic Law to complete the range of tools available to companies in distress to allow them achieve their financial recovery. The publication of these amendments in the Belgian Official Gazette took place on Friday 26 March 2021, making them effective immediately.

The main amendments are as follows:

In the context of the COVID-19 pandemic, many measures have already been taken to support the economy as much as possible during these turbulent times. It is already clear that the impact will be enormous and that the cash buffer built up by some companies will not be enough to survive this crisis. Measures such as deferrals on paying tax and social debts, temporary unemployment due to economic reasons and the Belgian State’s guarantee scheme for bank loans will not suffice for some.

Administration and deeds of company arrangement have continued to have significant influence on major restructurings in the Australian market. In larger restructurings, administrations represent significant transactions where capital is deployed strategically to acquire businesses at significant discounts. A sound understanding of the procedures is key to private equity players for many reasons. Portfolio companies can be exposed to administrations where suppliers, customers or competitors experience financial difficulties.

Through its decision of 27 November 2008, the Belgian Constitutional Court declared netting arrangements in insolvency proceedings, which are explicitly allowed under the Belgian Financial Collateral Law of 15 December 2004, unconstitutional where such netting arrangements apply to non-merchants. Despite the numerous criticisms about this decision, the amended Belgian Financial Collateral Law, entered into force on 10 November 2011, now explicitly excludes non-merchants from its scope.

The Belgian Constitutional Court declared netting arrangements in insolvency proceedings, which are explicitly allowed under the Belgian Financial Collateral Law of 15 December 2004, unconstitutional where such netting arrangements apply to non-merchants. Despite the numerous criticisms on this decision, a legislative proposal was drafted on 13 September 2011 in order to explicitly exclude non-merchants from the application of the Belgian Financial Collateral Law.