A mid-sized distribution company operating across three EU member states reached a critical inflection point. Its Belgian operating entity faced mounting pressure from a fragmented creditor base – trade suppliers, a secured lender, and a tax authority with priority claims – each pursuing divergent recovery strategies. Without a coordinated insolvency proceedings strategy, the business faced liquidation within weeks, destroying value that a structured plan could preserve.
Corporate restructuring in Belgium under the country's insolvency legislation provides distressed companies with a formal mechanism to propose a restructuring plan to creditors before the court. The debtor must satisfy threshold conditions of financial distress and demonstrate a viable path to continuity. A supervised process – typically spanning several months – allows the appointed administrator to coordinate proof of debt submissions and convene a creditors meeting to vote on the plan.
This case study outlines how the matter was handled, the strategy selected, the key complications encountered, and the lessons transferable to similar cross-border situations.
Client profile and the challenge
The client was the Belgian subsidiary of an Iberian-headquartered group. Its core business involved wholesale distribution across Belgium, the Netherlands, and France. Belgian operations generated the majority of group revenue but had accumulated significant short-term liabilities over two trading years.
The creditor base was diverse. A senior secured lender held a charge over the main warehouse asset. Several trade creditors – some themselves in financial difficulty – were owed material sums. The Belgian tax authority held priority status under Belgian insolvency legislation. A minority shareholder in the Belgian entity disputed the parent group's proposed contribution to the restructuring fund, adding a separate strand of corporate dispute risk in Belgium that ran in parallel.
The core challenge was sequencing. Engaging each creditor class individually risked one group accelerating enforcement before a plan could be filed. The window for voluntary restructuring under Belgian insolvency law was narrow – measured in weeks, not months. Delay risked converting a controllable restructuring into a compulsory liquidation, eliminating the going-concern premium entirely.
Legal strategy: choosing the restructuring path
Belgian insolvency legislation offers two primary routes for distressed but viable businesses. The first is a formal judicial reorganisation procedure. The second is a more flexible out-of-court arrangement, available where creditor classes can be aligned without court supervision. The team assessed both against the specific creditor composition in this matter.
An out-of-court arrangement was dismissed early. The secured lender's position was straightforward, but the tax authority's priority claim and its statutory enforcement rights under Belgian law made informal alignment impractical. The tax authority could not lawfully subordinate its claim without formal court approval. Judicial reorganisation was therefore the only viable path.
Under the judicial reorganisation route, a moratorium on enforcement is granted upon court acceptance of the petition. This immediately froze enforcement actions by all creditor classes. The appointed administrator was tasked with verifying each proof of debt submission and preparing a consolidated creditor schedule for court review. For the full range of restructuring options available in Belgium, the formal route offered the strongest procedural protection during the critical stabilisation phase.
The restructuring plan proposed a partial debt-to-asset transfer, a phased repayment schedule for trade creditors, and a negotiated settlement with the tax authority. The parent group agreed to inject working capital as a condition of plan approval – a key concession that gave the court confidence in continuity.
To receive an expert assessment of your restructuring options in Belgium, contact us at info@ferrazwhitmore.com.
Key milestones and complications
The petition was filed within ten days of engagement. Court acceptance triggered the moratorium within a further five business days. The administrator was appointed simultaneously and immediately issued proof of debt notices to all known creditors.
The first complication arose at the creditors meeting. Two trade creditors – both holding claims below the plan's minimum repayment threshold – sought to block the vote by challenging the administrator's valuation methodology. Under Belgian insolvency proceedings rules, a creditor may challenge the admission of a proof of debt before the meeting. The administrator's schedule was contested on technical grounds relating to currency conversion for a cross-border supply contract.
The challenge was resolved by producing a certified exchange-rate calculation and an amended proof of debt that the court accepted on an expedited basis. The creditors meeting proceeded approximately three weeks after the initial petition filing.
The second complication was the minority shareholder dispute. The shareholder sought an injunction to prevent the parent group from contributing capital on terms that diluted the minority position. This was managed as a parallel track – the corporate dispute did not interrupt the insolvency proceedings timeline, but required careful coordination to ensure that court submissions in both files remained consistent. A related restructuring approach applied to a Portuguese operating entity is documented in our case study on corporate restructuring in Portugal.
The restructuring plan was approved by the requisite creditor majority at the meeting. The court confirmed the plan within the statutory period. The moratorium was lifted upon confirmation, and the company resumed normal trading operations under a monitored repayment schedule.
Transferable lessons for cross-border restructuring matters
Three lessons from this matter apply directly to international businesses managing insolvency proceedings across EU jurisdictions.
First: creditor sequencing determines outcome before the filing. The decision to pursue formal judicial reorganisation. rather than attempting informal alignment. was driven by the composition of the creditor base. Not by the size of the debt. Where a tax authority or other statutory creditor holds priority claims, the presence of formal court supervision is often the only mechanism that prevents unilateral enforcement from collapsing a viable plan. A lawyer in Belgium experienced in multi-creditor matters will assess this composition before any approach is made to individual creditors.
Second: the proof of debt process is a litigation risk in disguise. Creditor challenges to the administrator's schedule are more common than many restructuring plans anticipate. Cross-border supply contracts introduce currency, jurisdiction, and valuation disputes that can delay or derail a creditors meeting. Preparing a forensically defensible proof of debt schedule – with certified valuations for all cross-border claims – reduces this exposure materially.
Third: parallel proceedings require a single coordinated strategy. Where a restructuring runs concurrently with a shareholder dispute or a regulatory investigation. The risk is not that either proceeding fails independently. it is that inconsistent positions taken across files create grounds for challenge in both. A law firm in Belgium advising on restructuring must maintain visibility across all related proceedings from day one. Compartmentalising advice by workstream, without a coordinating layer, is the most common structural error in complex multi-creditor matters.
To discuss a restructuring situation involving multiple creditor classes in Belgium or across EU jurisdictions, reach out to info@ferrazwhitmore.com.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our insolvency and restructuring practice supports distressed businesses, creditors, and investors in formal and informal reorganisation processes across both civil law and common law systems. The firm's attorneys have advised on multi-creditor restructuring and insolvency proceedings before courts in Belgium, Portugal, and across the EU, combining Portuguese civil law expertise with English common law tradition. Our Lisbon base provides direct access to EU regulatory regimes, while our cross-border experience supports enforcement and plan negotiation strategies in English- and French-speaking jurisdictions. Engaging a lawyer in Belgium with coordinated EU coverage is central to how we structure these mandates. To discuss how Belgian insolvency and restructuring law applies to your situation, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.