Glossary
Judicial settlement
Judicial settlement is a procedure designed to protect, under a judge’s control, the continuity of all or part of a struggling company. This procedure is a possible option when a trader, a person exercising a liberal profession or a company is in a suspension of payments situation. The company uses the judicial settlement procedure to try to give itself a second chance of maintaining its activity and protecting the jobs that it provides.
The judicial settlement can be requested by all stakeholders such as the debtor, the creditor, or the public authorities, but only if the tribunal fells that rescuing the company is feasible. If the company cannot be rescued, it could be declared bankrupt (if the two conditions of bankruptcy are met: suspension of payments and credit weakness).
There are 3 types of judicial settlement:
- Reorganisation via amicable agreement with the creditors, under the supervision of a judge (staggering of payments, write-off of part of the debt, etc.)
- Reorganisation by means of collective agreement with the creditors on the establishment of a restructuring plan.
- Reorganisation by transfer of all or part of the business to one or more third parties.
Updated 06/08/2018
Definitions provided under this section refer to the Belgian situation; unless specified otherwise. The texts are meant to summarize concepts in daily language and should not be considered as comprehensive or definite. We welcome suggestions for modifications or additions at glossary@tcm.be.