Insolvency proceedings in Luxembourg: Conditions
What are the conditions for a company to have to face insolvency proceedings in Luxembourg?
The District Court (Tribunal d’Arrondissement) will declare the company bankrupt if (1) it can no longer pay its debts as they fall due; and if (2) may no longer raise credit. This is one of the case where insolvency proceedings will be opened in Luxembourg.
The Tribunal will, generally in the judgment declaring the company in bankruptcy, declare the date on which the cessation of payment has occurred. Such date can be up to six months prior to the date of the bankruptcy judgment (this is the hardening period and certain transactions made during this period may be annulled).
The judgment will name the receiver (curateur) and a commissary-judge (juge-commissaire). As the case may be, the judgment will order that the offices of the bankrupted company will be sealed. The judgment will also set the date, within 20 days following the date of the judgment, on which all creditors must file and prove their claims. This date may be extended. Creditors will be informed about this in newspaper publications. A notification by mail will also be made by the receiver to the known creditors of the bankrupt.
Insolvency proceedings in Luxembourg can be very long. Indeed, Luxembourg law does not set out any mandatory timing in respect of the liquidation of the bankrupt company, which typically takes several months to several years, depending on the size and complexity of the business and the diligence of the receiver.Contacter LG AVOCATS