The aim of these modifications is to solve some issues that have arisen in respect of this
particular insolvency proceeding.
It is fair to say that the law is not fundamentally reviewed. The basic principles of this law are preserved.
More specifically, the focus remains on the preservation of companies and their development.
Notwithstanding this goal, the thresholds to benefit from this insolvency procedure have somewhat been increased. The access to the procedure has become more strict, which implies that a thorough preparation will be necessary in order to avoid that the request being dismissed.
Moreover, the relevant financial information needs to be verified by an external accountant or a
company auditor. As a result, the cost to start this procedure will raise substantially.
Not only do accountants and auditors receive a role concerning the verification of the financial information. In the future, they will have to, together with the fiscal consultants, contribute actively to the commercial investigations, carried out by the court. As from now, they have the obligation to inform the court in case they determine that the continuity of the company would be compromised, and if the management has not properly remedied this situation in time. The management has to guarantee the continuity of the company for at least twelve months.
In the future, creditors will be better informed regarding the course of the procedure. An electronic file will be set up, which is remotely accessible. Furthermore, creditors will have to be informed during the procedure in case any changes would take place.
The law aims to limit the risk of unfair competition, which can occur as a consequence of the procedure of judicial reorganization. In sectors, where only a limited number of players are active, the grace period can have an interfering effect on the competition. The reorganization with the remission of debt can cause a change in the competitive relations.
This way, an assessment framework will be offered to the court, in order to allow the court to deny the homologation of a collective agreement. The appreciation criterion in this regard is of public order.
It used to be possible to stipulate that 100% of certain debts could be remised. As from now, the law limits the remission of debts at 85% of the amount due. The public creditors, such as the social security service or tax administration will be treated equally as the best treated creditors. In other words, their position has been once more improved in comparison to other creditors.
It is important to note that the provisions concerning the transfer of employees, in case of a transfer of the company under judicial authority, have been substantially changed. The rules, which have to be taken into account by the judicial representative, in respect to the transfer of the rights and obligations of the employees who are involved in the transfer of the company, are not limited to the provisions of the law. The law will be further clarified in a collective employment agreement concluded in the National Employment Council.
Finally, concerning the employee representatives in the bodies of the company, the legislator has provided that basically, in case of a transfer, they continue to hold their function, unless it would be agreed otherwise. Protected employees (in the context of the employee representation) maintain their protection, even after the transfer has been carried out.