Law to help struggling businesses restructure will be reformed

Law to help struggling businesses restructure will be reformed
SME Minister David Clarinval. Credit: Belga

The law on the judicial reorganisation procedure (JRP), which allows companies in difficulty to agree with their creditors on a rescue plan, will be reformed as the moratorium on bankruptcies expires on January 31, L’Echo wrote on Friday, quoting SME Minister David Clarinval.

The moratorium protected businesses during the two waves of the coronavirus but cannot be extended indefinitely. However, no less than 84,000 businesses that were healthy before the pandemic are now in great difficulty.

Under the leadership of Clarinval and Justice Minister Vincent Van Quickenborne, the government will relax the JRP.

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Among the three changes envisaged in the reform is easier access for SMEs.

“The current law provides that 11 documents, including a financial plan, the updated balance sheets of the last three years or a list of creditors, must be provided from the outset, which requires significant administrative capacity and leads to the automatic ejection of 90% of SMEs, or even more,” Clarinval explained.

The reform also provides for the possibility of using mediation to negotiate with creditors without the procedure being published in the Moniteur belge. Once the agreement is put together, it can then be presented to the court and quickly approved.

Finally, the tax exemption will be extended. “Today, only JRPs obtained by court decision benefit from a tax advantage, not JRPs by amicable agreement. We are going to change this”, announces Minister Clarinval.

Clarinval hopes that the text will pass the Parliament within 15 days.

The Brussels Times

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