Restructuring and insolvency in Luxembourg (part two)
The reprieve from payment procedure allows a debtor to restructure its debt with the consent of a majority of its creditors outside of insolvency proceedings. Its purpose is to allow a business experiencing financial difficulties to suspend its payments for a limited period of time. The reprieve of payment has to be approved by creditors representing 75 per cent of all the outstanding amounts. For the purpose of calculating the required majority, those claims that are secured by rights of priority, mortgages or pledges, as well as the tax claims and other public charges, are not taken into consideration.
The reprieve (i.e. suspension of payments) may only be granted by the court: to a debtor forced by extraordinary and unforeseeable events to cease its payments temporarily, but who has sufficient assets and funds according to its duly verified balance sheet in order to satisfy all creditors, in principal and interest; or where the situation of the debtor, although currently in deficit, shows strong potential, which could allow a restoration of the financial situation.
During the period of time the reprieve from payment is in force, the debtor loses the right to manage solely its assets and is only allowed to manage its business under the control of a court-appointed commissioner (commissaire)…
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Briefings from Ogier
These two cases are helpful in terms of how the court sees the inter-relationship between the new article 47 test for mistake and the pre-existing provision of the TJL at article 11.
On 24 November 2014 Guernsey’s Legislation Select Committee passed the Companies (Guernsey) Law, 2008 (Amendment) Ordinance, 2014 with immediateeffect.