On April 24, 2020, Royal Decree n° 15 on the temporary suspension of executive and other measures, for the benefit of companies during the COVID-19 crisis was published, which is provisionally applicable until May 17, 2020.
As a result of this Royal Decree, companies that were healthy before the COVID-19 crisis, but have experienced difficulties since then due to the measures that have been taken, can benefit from protection against their creditors by means of a temporary legal moratorium. The protection is therefore not available for companies that already experienced difficulties before.
The essence of this protection is very similar to the one offered in the event of a judicial reorganisation. Conservatory or executory seizure, involuntary bankruptcy, involuntary dissolution or forced transfer under judicial supervision are thus no longer possible. The continuity of current agreements is also ensured. However, the moratorium does not affect the obligation to pay due debts, and voluntary bankruptcy or voluntary recourse to judicial reorganisation remain possible.
An affected party, other than creditors, can seize the president of the enterprise court, which will then determine whether or not the conditions for the moratorium have been met. If that is the case, the protection is granted automatically. As a result, the costs and the time spent are reduced, as no judgement of the enterprise court is required.
Thanks to this Royal Decree, companies experiencing difficulties in these exceptional circumstances are given temporary relief in the hope that this will flatten the insolvency curve.