Recent corona measures for companies
In this post, we update you on some recent measures that should help mitigate the economic and legal impact of the corona crisis.
- On April 9, 2020, RD No. 2 of April 9, 2020 came into effect regarding "the extension of limitation periods and other time limits for taking legal action, as well as the extension of time limits for the administration of justice and written procedure before the courts and tribunals".
Following are the main implications of this decision:
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- In the context of judicial law/civil procedure law, the time limits of justice (i.e., to perform a legal act such as statutes of limitation) or to pursue a legal remedy (e.g., appeal, opposition, or third-party opposition) are extended for 1 month if the deadline to be extended would normally expire in the period from April 9 to May 17, 2020. Thus, the deadlines are extended through June 3, 2020.
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When these measures were first extended by RD of April 28, 2020, the end date (previously May 3, 2020) of the aforementioned extension was not extended mutatis mutandis. It is (quite) possible that these measures will be further extended and that this end date will also be further shifted in time.
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- In civil cases, pleadings in principle no longer take place unless the parties oppose and thus expressly request oral proceedings in which case the cases are postponed or sent to the roll (i.e. indefinitely postponed). As a result, the written treatment the rule based on the briefs and supporting documents filed by the parties (preliminary). This rule also applies (provisionally) to all cases from April 11 through June 17, 2020.
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- Also on April 9, 2020, RD No. 4 appeared. "containing various provisions on co-ownership and company and association law in the fight against the Covid-19 pandemic". For general meetings of companies and associations as well as meetings of governing bodies thereof, this decree entered into force retroactively as of March 1, 2020. The decree provides a solution for the organization of general meetings (of shareholders or co-owners) and meetings of governing bodies that is obviously not at all obvious in light of the coronagraphs:
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- For companies and associations that must or had to call their general meetings in principle in the period from March 1, 2020 to June 30, 2020, if it cannot proceed without physical presence (by written decision in other words) it may be postponed until the current situation is normalized. If the general meeting can take place without physical presence, it will in principle take place on the date provided for in the by-laws. If possible, written handling is also preferred here.
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- Thus, the governing body may postpone the general meeting so that it can then take place within 10 weeks after the deadline by which the general meeting must legally take place.
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For example: companies with a fiscal year that runs parallel to the calendar year must in principle organize their annual/ordinary general meeting within 6 months after the closing of the fiscal year, i.e. at the latest by June 30. The postponement thus allows the general meeting to be postponed and take place at the latest 10 weeks later or on September 8, 2020.
In the first extension of these measures by RD of April 28, 2020, the 10-week period or its end date was not extended mutatis mutandis. It is (quite) possible that these measures will be further extended and that this end date will also be shifted further in time.
- Finally, on April 25, 2020, RD No. 15 (not retroactively) entered into force. "On the temporary suspension for the benefit of companies of implementing measures and other measures during the COVID-19 crisis" into effect. This decree should provide much-needed breathing space for companies that find themselves in a precarious situation due to the corona crisis. The decree provides measures for all businesses which (i) see their continuity threatened as a result of the corona crisis and its consequences but (ii) were not in suspension of payments on March 18, 2020 (cf. bankruptcy terms). The measures of suspension explained briefly below apply (provisionally) for the period from April 25, 2020 to May 17, 2020:
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- The decision provides a suspension of custodial and executive attachment as well as of the use or continuation of the means of enforcement. Excluded from this regime are (i) conservatory and executive attachments of real property, (ii) conservatory attachments of maritime and inland waterway vessels and (iii) - importantly - pledge redemption. Custodial and executive attachments among third parties (such as on a bank account, on claims or on wages) remain possible in principle.
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- The suspension protects the movable property of the company, such as means of production necessary for the continuity of the business. The suspension applies to all debts (including related interest) of the company.
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- Importantly, the decision also debts which are contained in an approved reorganization plan within the framework of a judicial reorganization procedure by collective agreement, provided that the reorganization plan was approved before or after April 25, 2020. The payment of these debts may (does not have to, voluntary payment is of course allowed) be extended by "a duration equal to the duration of the suspension" referred to in the decision (in other words, for the time being by 3 weeks).
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- For the duration of the suspension granted by this decision, in principle, further no bankruptcies or judicial dissolutions are pronounced. As far as bankruptcies are concerned, exceptions apply to writs of summons in bankruptcy issued by the Public Prosecutor's Office or when the bankruptcy is filed by the company itself. There is an important note here: the period within which a declaration of bankruptcy must normally be made (1 month) is also extended by this decision.
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- Finally, and also profoundly, the decision provides for a suspension of the possibility To judicial or unilateral dissolution of agreements concluded before April 25, 2020. The suspension applies to the performance of commitments related to "monetary debts" and "conventional mechanisms linked to non-payment" that are due and payable according to the contract. The suspension does not apply to employment contracts. The president of the corporate court may, in proceedings such as summary proceedings, grant expulsions and lift the suspension in whole or in part, where an examination of causality with the effects of the corona crisis will be central.
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Bannister Lawyers
At Bannister Attorneys at Law, Mr. Christophe VAN MECHELEN, Mr. Roeland VANSTAEN and Mr. Lore VEYT are ready to advise and assist you in dealing with the business and legal consequences of the corona crisis.
We are happy to help you identify and resolve, as much as possible, the concerns and work points that enterprises (will) face.
Meanwhile, we wish you first and foremost good health and much courage and optimism in fighting the corona crisis.
Mr. Christophe VAN MECHELEN
Mr. Roeland VANSTAEN
Mr. Lore VEYT
April 30, 2020
