In today's rapidly evolving business landscape, businesses find themselves at the intersection of technological innovation and geopolitical and economic turbulence. Despite the increased reliance on software systems and digital infrastructure, it remains peculiar that in many EU Member States there's still no clear framework for handling software licenses in insolvency.

On 27 May 2024, the draft bill on transfer of undertaking in bankruptcy (in Dutch: Wetsvoorstel overgang van onderneming in faillissement, the WOVOF) was made available for internet consultation. The WOVOF aims to increase the protection of employees in case of bankruptcy, and more particular, in case of a restart (in Dutch: doorstart). The WOVOF introduces, amongst other things, an obligation for the acquirer in a restart to (in principle) offer employment to all employees from the bankrupt company. This and other measures will be discussed in detail in this this news blog. 

This overview includes case law since mid-2022 and provides an overview of legal amendments that have a practical impact on national and international contracts.

Insolvency-based rescission clauses

Avoidance actions are a household staple for insolvency administrators to increase the insolvency estate in Austria. The current European Commission’s Proposal for a Directive (COM (2022)702) now aims to harmonise contestation rights in insolvency across all European member states.

On 14 September 2023, the Australian Securities and Investments Commission (ASIC) released Consultation Paper 372 "Guidance on insolvent trading safe harbour provisions: Update to RG 217".

Belgium had accumulated a significant legislative backlog within insolvency law. The European Directive 2019/1023 on restructuring had to be transposed into national law by the member states by 17 July 2022 at the latest. The Belgian government did not submit a draft bill to this effect until 20 March 2023. This draft has since been voted into law and will enter into force on 1 September 2023.

Several amendments are being made to (among others) Book XX of the Belgian Economic Law. The main amendments are briefly discussed below.

A “pre-pack” is a sale of all or part of a distressed company’s business or assets, negotiated before the company enters a formal insolvency process and executed by the appointed insolvency practitioner immediately after the insolvency process begins.

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.

With increased distress in the mid-market we may well see lenders using different tools to keep a closer eye on a company’s financial performance. One of those tools is to appoint a board observer.

An overview of Guernsey legislative and regulatory developments for the period 1 December 2022 to 28 February 2023 inclusive.

1 Corporate insolvency regime – update

The Companies (Guernsey) Law, 2008 (Insolvency) (Amendment) Ordinance, 2020 (the Amendment Ordinance) finally came into force on 1 January 2023.