Judicial Reorganization (JR) in Belgium: Saving Your Business

What Is Judicial Reorganization?

The judicial reorganization (JR) procedure, governed by Book XX, Title V of the Code of Economic Law, is an alternative to bankruptcy that allows a financially distressed company to restructure while continuing its activities. It provides temporary protection from creditors.

Who Can Benefit?

Any enterprise under the CEL can apply for JR when:

• The continuity of the business is threatened in the short or medium term
• The situation is not irretrievably compromised
• A realistic recovery plan is feasible

The Three Forms of JR

1. JR via Amicable Agreement (Article XX.65)

The company negotiates an amicable agreement with all or some of its creditors under court protection:

• Stay of payment during negotiations
• Confidential agreement between the parties
• The court ratifies the agreement, binding the signatories
• Maximum flexibility in agreement terms

2. JR via Collective Agreement (Article XX.67)

The company proposes a reorganization plan to all its creditors:

• Possible reduction of claims (maximum 80% for unsecured creditors)
• Payment rescheduling (maximum 5 years)
• The plan is submitted to creditor vote (majority in number and amount)
• The court ratifies the plan, binding all creditors, including those who voted against

3. JR via Court-Supervised Transfer (Article XX.84)

The court orders the transfer of all or part of the company's activities to a buyer:

• Appointment of a court-appointed agent
• Call for buyer candidates
• Transfer of employment contracts (specific rules under CBA No. 102)
• Transfer proceeds are distributed to creditors

Step-by-Step Procedure

1. Filing the Petition

The company files a petition with the competent enterprise court, accompanied by:

• A statement of reasons justifying the request
• The last two annual accounts
• A recent accounting statement (max. 3 months)
• A forecast budget
• A list of creditors with amounts owed

2. Opening Judgment

The court rules within 15 days of filing. If it accepts the request, it pronounces:

• The opening of JR proceedings
• A stay of payment (maximum duration of 6 months, renewable)
• Possible appointment of a court-appointed agent

3. Stay Period

During the stay, the company benefits from essential protections:

• Prohibition of enforcement measures by creditors
• Suspension of seizures
• Continuation of existing contracts
• The company continues operations under supervision

4. Plan Execution or Transfer

Depending on the chosen form:

• Negotiation and conclusion of the amicable agreement
• Voting and ratification of the collective reorganization plan
• Completion of the court-supervised transfer

Benefits of JR

• Immediate protection from creditor claims
• Business continuity and job preservation
• Possible confidentiality (amicable agreement)
• Debt reduction up to 80%
• Fresh start for the entrepreneur

Conclusion

Is your business facing financial difficulties? LegalBelgique assists you in evaluating your situation and implementing judicial reorganization proceedings. Act before it's too late to preserve your business.