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)…
Click on the link below to read the rest of the Ogier briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Ogier
News from The Lawyer
Briefings from Ogier
What makes Jersey so attractive to companies? (And there’s more to it than tax.)
Funds update: AIFMD implementation under fire; European agreement on beneficial ownership registers; and more
Also: new Jersey accounts documentation and recent case law.