It is generally accepted that the last quarter of 2020 will be a risky period for many businesses. The reason for this is not far-fetched, although it is maybe a little too easy to put all the blame on Corona. In any case, it is no longer a disgrace to have to admit problems to pay all suppliers.

During lockdown period, many companies were still able to survive with the special government coronacrisis measures. But now, as these measures are being systematically phased out, risk of bankruptcy has increased.

We are thinking in particular of the hotel and catering sector, arts and culture sector, construction sector, retail sector, transport sector, business services sector and so on. 

But fortunately, for many cases, the legal instruments of insolvency law are available to save your businesses. We will go into that in more detail below.

What to do if your client doesn't pay? The law offers several alternative measures to obtain payment either in full or at least partially.

What to do if you can no longer pay your suppliers? Also for debtors the law offers several alternatives to either postpone payments or to reduce payment obligation.

Hence the law offers the following possibilities for both creditors and debtors, but in all situation co-operation of both sides is a perquisite.

1. Appointment of a business mediator

Businesses and entrepreneurs who face difficulties to pay their debts can request the president of the court to appoint a business mediator. The latter can assist with the reorganisation, both within as outside the proceedings regarding the judicial reorganisation.

2. Amicable arrangement

Businesses and entrepreneurs who face difficulties to pay their debts can offer to two or more, or all their creditors an amicable arrangement. This can be reached in concertation with the business mediator.

The parties are free to agree on the terms and conditions of their arrangement.

However, some conditions must be met to obtain the protection provided by the insolvency law:

  • The agreement must be in writing;
  • The usefulness of the arrangement in view of the reorganisation must be explained and motivated;
  • An explicit confidentiality clause must be included; as well as
  • An explicit non-severability clause (to avoid cherry-picking).

The amicable agreement must be filed in a specific register.

3. Judicial reorganisation proceeding

If the continuity of a business (a company or a self-employed person) is threatened, whether immediately or further in the future, the proceedings regarding a judicial reorganisation can be started.

These proceedings allow the business to maintain the continuity of its activities, either partially or in total.

As from the moment that the proceedings are started with the court, and pending the decision of the court, the business cannot be declared bankrupt or dissolved by a court decision. The forced execution of court decisions or other deeds, such as a public sales are stopped.

The court decision to open the judicial reorganisation, allowing the suspension, has several consequences, that all aim to give the business the opportunity to continue its activities, without giving it a free pass. The business cannot just escape from its obligations, creditors and contracting parties keeping certain of their rights.

Hereafter follow some of the most important consequences of the protection, but they are not unconditional and in certain cases the court has to be involved:

  • During the suspension period claims cannot be executed anymore and/or their (forced) execution cannot be continued; seizures for debts that originated from prior to the proceedings are not allowed. The court must be involved for certain cases;
  • The business cannot be sued in court in view of a bankruptcy;
  • The business can continue to pay certain creditors if such payment is required to maintain continuity; setting-off of claims is allowed subject to certain conditions;
  • Penalty clauses and clauses to increase the interest are suspended until the full execution of the reorganisation;
  • Employment agreements are not suspended;
  • Claims that originated from prior to the reorganisation proceedings are not taken into consideration in the framework of public tenders. Hence, the social security and tax authorities are not allowed to mention such claims in the certificates they have to issue in the framework of the public tender market.

But, on the other hand the suspension does not cause the termination of the agreements. They will remain in force and have to be executed in accordance with their terms and conditions. Agreements can be terminated by each party, if certain conditions are met. The business in reorganisation has the right to unilaterally suspend the execution of certain agreements.

Agreements with continued performances, including those that generate interest, will not be suspended, at least in respect of the performances to be executed after the opening of the proceedings. More in particular, loans and the related payment obligations have to be respected.

Social security and tax payments will not be suspended and have to be paid as and when due.

The aim of the proceedings regarding the judicial reorganisation is to safeguard the continuity of the business activities, but it is definitely not a free pass. Creditors keep certain rights, and can recover at least a part of their claims, as well as possible (contractual) damages, if they follow the rules of the law.

If you are confronted with financial difficulties or if you are a creditor, please call us (+32 (0)2 747 40 07) or send an e-mail at

Would you like to learn more about this subject?

Contact our experts or telephone +32 (0)2 747 40 07
Leo Peeters

Leo Peeters

Toon Rummens

Toon Rummens

Leila Mstoian

Leila Mstoian

Aurélie Glinne

Aurélie Glinne

Senior Counsel