The Restructuring Expert: The New Kid on the Block
From 1 September 2023, the restructuring expert will make their first appearance in Belgian restructuring law. This new court-appointed practitioner can be assigned a variety of tasks, ranging from assisting the debtor in negotiations with creditors to supervising the restructuring process and compliance with creditor information obligations.
As a reminder, in Belgian reorganisation proceedings the debtor traditionally retains control of the business during the reorganisation (debtor-in-possession)1, save in exceptional cases of misconduct, when a provisional administrator can be appointed by the court.
As soon as a reorganisation procedure is filed for, a delegated judge (gedelegeerd rechter) will automatically be appointed by the court. However this court officer does not interfere with the debtor’s business or the reorganisation itself, but rather plays a supervisory role and reports to the court.
Whereas under the old regime it was possible for a debtor to request a corporate mediator, this court officer had no decision-making powers and was therefore strictly depended on the good will of the debtor and its creditors (which is why such appointments were rarely requested in practice).
What (or better, who)’s new?
Like the court officers under the old regime, the new restructuring expert is appointed by the court, but besides the debtor creditors may also request their appointment. This is quite a significant innovation and (indirectly) allows creditors to have a say in the actual restructuring.
The restructuring expert’s role and tasks (as stipulated in the court order appointing it) can vary greatly and may include:
- mediation in negotiations on the reorganisation plan;
- drawing up a restructuring plan and advising on the composition of "classes" of creditors (see Collective plan reorganisations: The new voting system for large companies)
- valuation of creditors' rights under a plan and in the event of bankruptcy or liquidation;
- supervising the reorganisation process conducted by the debtor in the interests of creditors (eg compliance with information obligations to creditors);
- requesting on behalf of the debtor an ad hoc moratorium against specific creditors in the context of closed reorganisation proceedings (See Private reorganisation proceedings: Avoiding negative publicity);
Given this variety of potential tasks, the legislator considered it desirable to allow the courts to freely choose an expert suitable for the specific assignment (rather than limiting the court’s choice to a predetermined list). The debtor (or creditors) may also propose someone in particular in their request. Examples mentioned in the parliamentary works include: senior government officials, lawyers, business executives, accountants and auditors (non-exhaustive).
Though the parliamentary works to the new Act reiterate the debtor-in-possession principle, this new actor (especially when compared to the court officers under the old regime) has undeniably been given significant powers in terms of steering the process and influencing the reorganisation plan.
It’s particularly interesting that creditors can also now ask the court to appoint a restructuring expert. Considering its initiative right to draw up and submit a reorganisation plan, which the debtor having the final say on the plan may not unreasonably refuse, this new actor (and by extension, the creditors who have proposed them to the court) could have a major influence on the process and the content of a restructuring plan and exert pressure on the debtor to duly take the creditors’ interest into account when restructuring.
Key takeaways:
- New restructuring expert enters into Belgium’s restructuring framework
- Extensive range of roles/tasks (despite ‘debtor-in-possession’ principle)
- Initiative right for creditors to request the appointment and propose an expert
- Ability to draft and submit a restructuring plan (which the debtor cannot unreasonably refuse)
How can we help?
Our Belgian Restructuring Team (Legal 500, Tier 1 Insolvency) has significant experience in restructuring and consists of certified insolvency practitioners that are regularly appointed by the Belgian courts as provisional administrators, liquidators, bankruptcy receivers, corporate mediators and soon as restructuring experts.
Do not hesitate to reach out to our team.
1 In the case of a business transfer under judicial authority, this principle must however be nuanced given the appointment of a court officer supervising the competitive bidding process.
