Introduction
Preventive measures
Out-of-court reorganisation
In-court reorganisation
Modernisation of bankruptcy
The long-awaited new Luxembourg law on business preservation and modernisation of bankruptcy law voted by the Luxembourg Parliament on 19 July 2023 (the Law) implementing EU Directive 2019/1023 of 20 June 2019 contains a range of new preventive reorganisation procedures, notably (i) conservatory measures (appointment of a conciliator), (ii) an out-of-court reorganization procedure by mutual agreement (réorganisation par accord amiable) and (iii) judicial reorganisation proceedings (JRP).
If bankruptcy proceedings are commenced against a debtor or if a debtor enters into a court-approved composition agreement with an assignment of all of its assets, transactions executed by the debtor during the last five years are subject to scrutiny.
The purpose of claw back claims is to recover assets extracted from or given away by an insolvent debtor for the benefit of its insolvency estate and ultimately its creditors. Transactions may be subject to claw back actions if:
On 15 November 2023, the Temporary Transparency of Expedited Liquidation Act enters into force, initially for a period of two years. Expedited liquidation (also known as 'turboliquidation') concerns the dissolution of a legal entity with no assets, at its own initiative. The temporary Act aims to increase transparency in the case of an expedited liquidation and to improve the protection of creditors.
European leveraged finance transactions (i.e., acquisition financing by fund sponsors of European targets) are often structured through Luxembourg or the Netherlands because those are creditor-friendly jurisdictions for the creation, perfection and enforcement of (certain) security interests. Structuring through Luxembourg or the Netherlands provides a high degree of transaction flexibility compared to other jurisdictions.
The Belgian legislator is preparing a legal framework on insolvency law to expand the restructuring toolbox. On 26 March 2023, a draft bill was published transposing EU Directive 2019/1023 on restructuring and insolvency. The Bill should be voted before the summer holidays. Our Restructuring & Insolvency team has identified five things you need to know about the upcoming changes.
The effects of Brexit have had seismic consequences for all aspects of law, not just in the UK but in Europe more widely. This month we hear from four Loyens & Loeff team members specialising in insolvency and restructuring matters, who take a look at the corporate insolvency fallout for Luxembourg specifically. How have Schemes and restructuring plans been impacted by the UK’s exit from the EU, and what has it meant for enforceability of judgements?
1.1 Are there international treaties and/or cross-border instruments applicable?
The restructuring Q&A provides a comprehensive overview of some of the key points of law and practice of restructuring in Switzerland.
1.1 What formal insolvency proceedings are available in Switzerland?