On June 7, 2023, Belgium enacted significant changes to its insolvency legislation with the introduction of the Law of June 7, 2023, transposing the restructuring directive. This law has substantial implications for the role and responsibilities of insolvency practitioners. In this article, we discuss some essential points for insolvency practitioners in light of this new legislation.

1. Application in time

A crucial aspect of the new law is that it only applies to insolvency proceedings initiated from September 1, 2023. Currently, there are three regimes in effect simultaneously:

• For old bankruptcies, the Bankruptcy Law of 1997 remains applicable.
• For bankruptcies opened between May 1, 2018, and August 31, 2023, Book XX ELC in the 2017-2018 version applies.
• For new bankruptcies from September 1, 2023, the revised Book XX ELC applies.

It is vital for insolvency practitioners to understand the applicable regime and follow the appropriate procedures based on the opening date of the bankruptcy.

2. Terminology

The law introduces new terminology regarding court mandataries. Insolvency practitioners are now referred to as ‘liquidation experts,’ while court mandataries in judicial reorganizations are known as ‘restructuring experts.’ Both groups are part of the broader category of ‘court mandataries’. The term ‘insolvency practitioners' no longer applies.

3. Major changes

The new law includes two major changes, both before and after bankruptcy:

3.1 Confidential Preparation of Bankruptcy

The new law provides for the confidential preparation of bankruptcy, known as ‘pre-pack.’ An ‘intended insolvency practitioner’ can, under the supervision of an ‘intended judge-commissioner,’ secretly prepare the transfer of activities. This procedure can last up to 60 days.

3.2 Remission

The regulations regarding remission (Article XX.173 ELC) undergo significant changes. The bankrupt natural person will automatically be eligible for remission of remaining debts, without needing to file a request. However, stakeholders, including insolvency practitioners, can petition for the remission to be fully or partially denied if they can prove that the bankrupt committed serious faults contributing to the bankruptcy or provided incorrect information. A partial denial is proportionally distributed among all creditors.

The right to challenge remission expires three years after the verdict of bankruptcy, and third parties can exercise this right through a petition. Insolvency practitioners must now also prepare reports concerning these issues.

4. Other Practical Changes

In addition to the major changes, there are other practical alterations that insolvency practitioners need to consider:

• Clarification of legal remedies against the bankruptcy declaration (Article XX.108 ELC).
• Changes in the suspension of seizures (Article XX.120 ELC).
• New job description for co-insolvency practitioners of liberal professionals (Article XX.123 ELC).
• Reporting obligation for insolvency practitioners regarding potential conflicts of interest (Article XX.126 ELC).
• Electronic communication with bankrupts (Article XX.146 ELC).
• Changes in summons procedures for verification of claims (Article XX.158 ELC).
• Adjustments in data processing in disputes (Article XX.161 ELC).
• Optional hearings for bankrupts (Article XX.166 ELC).
• Modified summons procedures for settlement meetings (Article XX.170 ELC).
• Authorization for the sale of real estate in co-ownership (Article XX.193 ELC).

It is crucial for insolvency practitioners to stay abreast of these changes and adapt their practice to the new legislation to effectively carry out their duties and comply with legal requirements.

Please note that this summary is not an exhaustive analysis of the law of June 7, 2023, and it is advised to seek legal advice and consult the full text of the law for a deeper understanding of the amendments and their practical implications.