Insolvency: clarification of the rights of the creditor with a general pledge on the present and future receivables of his debtor

In a ruling from 16 January 2020, the Court of Cassation had the opportunity to backtrack on the question of the rights of a creditor who had contractually reserved a general pledge on all of his debtor’s current and future receivables prior to his admission to judicial reorganization.

In the present case, the appeal was directed against a decision of the Antwerp Court of Appeal. The latter had dismissed the lawsuit filed by a creditor against the approval of a judicial reorganization plan, which classified his receivable as to being part of the ordinary “stayed” receivables (receivables arising prior to the judgment opening the judicial reorganization or arising from the filing of the judicial reorganization application or the judicial decisions taken during the proceedings). To this end, the Court of Appeal had considered that, on the day of the opening of his debtor’s judicial reorganization, the creditor did not show any proof of registration of his security in the register of pledges, in force since 1 January 2018, thus making it impossible for him to establish having an extraordinary stayed receivable.

The Court of Cassation overturned this ruling and put an end to the controversy related to the quality of receivables secured by a general pledge on all receivables. The Court points out that the law on personal property security does not impose any registration of a pledge on receivables, which in fact remains an “obscure” security whose effectiveness against third parties is ensured by the mere conclusion of the contract.

In such circumstances, with regard to the legal definition of “an extraordinary stayed receivable”, the Court rightfully contends that a creditor who owns such a security must be regarded as an extraordinary stayed creditor up to the going-concern value of the pledged receivables.

For more information on that subject, feel free to contact Virginie SCHOONHEYT esq. (

Best regards,
The Cairn Legal team