28 April 2020

Creditors Locked Down!

image_pdfimage_print

At least until 17 May 2020 it is forbidden to carry out executory and even conservatory seizures against debtors. Companies in Belgium are now protected against their creditors during the COVID-19 crisis, following the 24 April 2020 emergency Royal Decree regarding enforcement measures and other measures threatening the continuity of companies.

It is also forbidden to introduce bankruptcy proceedings against a company. In addition the company which would be in cessation of payments is no longer obliged to make an admission of bankruptcy within the time limit set by law.

On a contractual level, agreements concluded before the entry into force of the Decree (18 March 2020) cannot be resolved unilaterally or by judicial means due to a failure to pay a debt of money due under the contract. The Decree does not derogate from the obligation to pay the debts due, nor from the contractual remedies under ordinary law such as set-off and the right of retention.

There is an important way out: a creditor can initiate summary proceedings before the president of the company’s court in order to obtain that the debtor does not benefit from the stay granted. The Decree mentions specifically that the court will have to take into account if the debtor was effectively impacted by the COVID-19 crisis.

share this news