The Judicial Reorganisation Procedure (PRJ): what is it?

Do you have business debts (VAT, social security contributions, rent, tax, banks, suppliers, bailiffs, etc.) that you can no longer repay? How can you avoid bankruptcy? Do you want to reduce your debts? Do you want to help your business in difficulty?

As reported by RTBF, ‘20% of companies that were healthy before the pandemic are now in serious financial difficulty’ (1), and this figure is likely to rise in the coming months.

That's why the Brussels-Capital Region, through BECI, is helping you to finance 75% of the administrative costs of a JRP (up to a maximum of €5,333.33 including VAT). As a result, you will be able to apply for deferred payment on all your debts. Take advantage of these support mechanisms to avoid bankruptcy, such as the JRP (judicial reorganisation procedure) or debt mediation.

Avoid bankruptcy by introducing a JRP? What is the purpose of a JRP?

Its purpose is to find a solution to financial problems.

How? By negotiating an agreement to reduce the company's debts, but in a much stricter and more formal way. Under a JRP, a company in difficulty asks the court for a period of time to get back on its feet, during which its creditors will leave it alone. During this period, the company puts in place a recovery plan, which must be approved by the creditors and the court, and which will enable it to pay off its debts.

You wish to apply for intervention of the handling fee for a JRP:

This form can be completed by the entrepreneur concerned or by the chartered accountant or lawyer who wishes to submit an application on behalf of his client.

Who can apply for a JRP?

Companies, NPOs and natural persons.

If you are a chartered accountant or lawyer, click this link .

Difference between JRP, Debt mediation and Bankruptcy

Both procedures are equally valid; they are simply better suited to some cases than others. To find out whether you should opt for mediation or a JRP, use the table below.

JRP or mediation?

To help you, we have put in place a short questionnaire which will only take a few minutes to complete, and which will help you to see things more clearly.

Is there any aid available to finance these procedures?

Yes, the Brussels Region, via BECI, will help you finance this aid up to 75% (with a maximum of €5,333.33 including VAT). To benefit from the Region's aid, the company must, among other things, prove that it was viable on 31 December 2019.

What other conditions apply?

• Conducting business in Brussels,
• Being the manager with decision-making,
• No more than 3 bankruptcies in the last 5 years,
• No convictions in the preceding 5 years,
• Having positive equity

Apart from JRP and mediation, what other ways are there of reducing debt?

1. Borrowing, but that's not ideal when you're already in debt

2. Recapitulate, via family or friends for example

3. Disposing of assets

Are you a chartered accountant or lawyer?

You can submit a service request for your customer using this form.

You may submit an application to intervene in the costs of the judicial reorganisation procedure for your client for the following JRPs, for which you will be asked to provide an attestation :

• Judicial reorganisation procedure by collective agreement
• Judicial reorganisation procedure by amicable judicial settlement (prepack)
• Judicial reorganisation procedure by transfer

The JRP (Judicial Reorganisation Procedure) and the Judicial Amicable Settlement or ‘prepack’ agreements in brief:

1. New solution  

Alongside corporate mediation, where the mediator works alongside the directors, there is also a new form of amicable agreement that can be negotiated with some or all of the creditors. This is the judicial amicable agreement procedure, also known by the term ‘prepack’.

It is preparatory to a JRP, but it can also stand on its own if the agreements reached are viable as such for the company.

The prepack is situated upstream of the ‘classic’ judicial reorganisation procedure (art. XX.39, CDE for the JRP) which allows for a suspension of claims and a standstill period, the legislator has temporarily put in place until the end of 2021 a light procedure, a judicial amicable agreement, (art. XX.39/1 CDE for the preparatory agreements of the Judicial Amicable Settlement).

2. Procedure

The Judicial Amicable Settlement is confidential in the sense that, as it normally prepares a classic JRP, it is not published in the Belgian Official Journal and does not require as strict a formal character as the classic JRP. In fact, of the 11 documents requested in the classic JRP, only 3 must be attached immediately to the Judicial Amicable Settlement request. The other documents are provided during the procedure. Translated with DeepL.com (free version)

3. Tax benefits

In order to encourage this amicable settlement, the tax exemption for amounts negotiated in favour of the company, granted to traditional JRPs, has been extended to this new prepack procedure. For example, a company negotiates a 40% debt write-off with a supplier. In accounting terms, this debt write-off is considered as income, a profit. The tax advantage relates to the profit made by not repaying the creditor's debt. This profit will be tax-exempt. The company will not pay tax on this profit granted by the creditors (in our example 40%), even though the creditor's invoice was initially included in the company's deductible expenses. Translated with DeepL.com (free version)

4. Intervention of the Brussels-Capital Region

With these advantages, managers or those involved (lawyers, chartered accountants) will be able to meet creditors in complete discretion and thus avoid them demanding rapid repayment of their debts before an amicable settlement has been reached. Both the classic JRP procedure and the ‘prepack’ amicable agreement procedure are covered by the aid from the Brussels Region.

Questions  

Would you like to apply for assistance with the costs of the case but still have questions about the JRP?

Do you have any questions about the conditions for validating your application?

You've already started the process and are stuck at a stage/question?

Contact Wassima Hadi, our PJR/Mediation advisor

by videoconference  by making an appointment here

via our call-center on 02 533 40 90

or by e-mail

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