07 Oct Significant changes in the Continuity of Enterprises Act
Posted at 00:00h in Newsletter
On 1st August 2013, several amendments to the Continuity of Enterprises Act (CEA) came into force.
These legislative changes are trying to set up solutions to misuses of the judicial reorganization procedure that frequently occur.
The main changes are:
- an increase of the requirements to access to the procedure (including the obligation to submit, along with the petition to start the proceedings, an accounting statement not older than three months, drawn by a company auditor, an external auditor, an accountant or a certified accountant- tax expert);
- a better protection of creditors in the context of a judicial reorganization by collective agreement (for example, in determining that the proposed repayment in the reorganization plan creditors can never fall below 15% of their debts, measure for which the legislator has however made exceptions)
- a better protection of creditors in the event of judicial reorganization by transfer under judicial authority (for example by requiring that the minimum transfer price can never be less than the estimated realization price in the event of liquidation or bankruptcy);
- a better protection of workers of the enterprise in judicial reorganization (including in making applicable the Collective Labor Agreement nr. 102 dated 5 October 2011 in case of judicial reorganization by transfer under judicial authority).
In parallel to these legislative changes, the CEA offers interesting possibilities to safeguard the continuity of the company. This means that the sacrifices required from creditors can still be very important.
CAIRN LEGAL has extensive experience in this field. This experience has taught us that it is essential, both for struggling businesses who want to carry out this type of procedure and for creditors of these companies to undertake appropriate actions on time.
If you want more information about it, do not hesitate to contact Ms. Laurence van de Kerchove (firstname.lastname@example.org) or Mr. Jonas Deryckere (email@example.com).