Modernisation of Luxembourg insolvency law

Luxembourg insolvency law has recently added new measures and proceedings designed to reorganise the assets or activities of a Luxembourg debtor.

The law of 7 August 2023 on business preservation and modernisation of bankruptcy law (Reorganisation Law) applies to certain Luxembourg commercial companies and came into force on 1 November 2023.

In short

THE LARGEST EVER REFORM TO MODERNISE LUXEMBOURG INSOLVENCY LAW IS DUE TO BE ADOPTED BY THE LUXEMBOURG PARLIAMENT ON WEDNESDAY 19 JULY 2023

Luxembourg will further increase the attractiveness and competitiveness of its restructuring and insolvency framework – the law on business preservation and modernisation of bankruptcy law (Law), which aims to modernise insolvency law and also grant a second chance to entrepreneurs, is due to be voted by the Luxembourg Parliament on Wednesday 19 July 2023.

ON 18 OCTOBER 2022, THE LUXEMBOURG PARLIAMENT PASSED A LAW (THE “LAW”) INTRODUCING AN ADMINISTRATIVE PROCEEDING BY WHICH A COMPANY MAY BE DISSOLVED WITHOUT LIQUIDATION (PROCÉDURE DE DISSOLUTION ADMINISTRATIVE SANS LIQUIDATION) (THE “ADMINISTRATIVE DISSOLUTION PROCEEDING”) AT THE REQUEST OF THE PUBLIC PROSECUTOR (PROCUREUR D’ETAT). THE LAW IS THE FIRST PART OF THE LARGEST-EVER REFORM TO MODERNISE LUXEMBOURG BANKRUPTCY LAW.

Objective of the Administrative Dissolution Proceeding

ON 18 OCTOBER 2022, THE LUXEMBOURG PARLIAMENT PASSED A LAW (THE “LAW”) INTRODUCING AN ADMINISTRATIVE PROCEEDING BY WHICH A COMPANY MAY BE DISSOLVED WITHOUT LIQUIDATION (PROCÉDURE DE DISSOLUTION ADMINISTRATIVE SANS LIQUIDATION) (THE “ADMINISTRATIVE DISSOLUTION PROCEEDING”) AT THE REQUEST OF THE PUBLIC PROSECUTOR (PROCUREUR D’ETAT). THE LAW IS THE FIRST PART OF THE LARGEST-EVER REFORM TO MODERNISE LUXEMBOURG BANKRUPTCY LAW.

Objective of the Administrative Dissolution Proceeding