In a contribution from early 2023, we explained the distinction between an “accredited mediator” (médiateur agréé) appointed jointly by parties to resolve a particular dispute and an “enterprise mediator” (médiateur d’entreprises), who (at that time) was designated by Article XX.36 of the Code of Economic Law and appointed at the unilateral request of a company in difficulty.
Article XX.36 of the Code of Economic Law was repealed by Article 44 of the Law of 7 June 2023 which came into force on 1 September 2023. As we shall see below, the role of the company mediator is now taken on by a ‘reorganization practitioner’.
Reorganization practitioners have specific experience in insolvency law which makes them particularly valuable in the process of restructuring companies in difficulty, as provided for by Book XX of the Code of Economic Law. Strictly speaking, they are judicial representatives who, while contributing (subject to a minimum of formal constraints) to the recovery of a company in difficulty can, at the same time, bring about a resolution of individual disputes.
For example, a reorganization practitioner could act at the request of a franchisee who has a dispute with his franchisor, and at the same time is confronted with a revocation of his bank loans due to disappointing turnover figures and liquidity shortages. In this case, once appointed and strengthened by an “official/judicial” mandate, the enterprise mediator (now reorganization practitioner) will strive, respecting all confidentiality, to get everyone on the same page in the short term and can, hopefully, save the company from collapse. In that context they may approach the bank and other stakeholders, possibly including the staff, as well as suppliers and also make contact with the franchisor and mediate “classically” (as an accredited mediator does).
Appointment of an enterprise mediator (now reorganization practitioner) at a very early stage, (i.e. before resorting to private or collective judicial reorganization procedures), can be a very efficient preventive tool. However, this tool remains relatively unknown and unloved, despite the regular and active information campaigns of the courts, via social media, seminars and also via their website. (For an application to appoint a reorganization practitioner see the forms available (in FR and NL) from the Brussels Enterprise Court). (In Dutch a brochure about the appointment of a reorganization practitioner is available here .)
By an Act of 7 June 2023 implementing the Restructuring Directive (1), which entered into force on 1 September 2023, the Belgian legislator considered that the role of a “reorganization practitioner” (“praticien de la réorganisation”) defined in the Restructuring Directive should be included in the Code of Economic Law (Book XX).
The definition of a ‘reorganization practitioner’ as a legal representative appointed by the insolvency court and set forth in Book I, Chapter 14, Article I.23 7°/01 of the Code of Economic Law is almost identical to that included in the Directive. In particular, the reorganization practitioner is to:
- assist the debtor or creditors in the preparation or negotiation of a reorganization plan;
- supervise the debtor’s activities during the negotiation of a reorganization plan, and report to the court;
- exercise partial control of the debtor’s assets or assets without dispossession, before or during the negotiations for a judicial reorganization.
As you may notice, this definition refers to tasks that were previously performed by ‘judicial representatives’ (“gerechtsmandatarissen” or “mandataires judiciaires” and before that by so called ‘commissioners for deferment [of debts]’ (“commissarissen inzake opschorting” or “commissaires au sursis”). They are all replaced by the reorganization practitioner.
Notably, however, the definition does not refer to another core task of the reorganization practitioner, namely his role as an enterprise mediator. Moreover, the definitions in the Code of Economic Law Book I, Chapter 14, might (wrongly) give the impression that enterprise mediation is no longer part of business reorganization … Until, that is, one comes across Section 3 of Book XX, Chapter 2 (Art. XX.29/2), which is entitled ‘Enterprise mediation’ (“Ondernemingsbemiddeling“ / “Médiation d’entreprise“ ).
Article XX.29/2 clarifies that at the request of the debtor, the Chamber for Enterprises in Difficulty can appoint a reorganization practitioner (read: enterprise mediator) to facilitate the recovery of the company. Furthermore, the article states that both the terms of the reorganization practitioner’s mediation tasks (… “sa mission de médiation” … “de opdracht van de bemiddeling”) and the reports of the reorganization practitioner (read: enterprise mediator) are confidential.
Finally, note that, apart from appointment on the basis of Article XX.29/2 of the Code of Economic Law, in certain urgent cases (where, for example, the Chamber for Enterprises in difficulty is unable to sit), the President of the Enterprise Court may make a provisional ruling on all applications falling within the competence of his/her Court, on the basis of Article 584 of the Judicial Code.
Conclusions: Due to the designation of ‘reorganization practitioners’ coupled with the deletion of the Article that explicitly referred to ‘enterprise mediators’ in the current Code of Economic Law: it will not be surprising if both companies and legal advisors have lost track of the continuing role for ‘enterprise mediation’ as it impacts companies in difficulty. Even if referred to by another name, the role of the enterprise mediator continues to exist, whether assisting as a restructuring expert in pre-insolvency tasks or, at a later stage, acting to assist the debtor with a reorganization plan, supervising business activities, including (on occasion) partial control of assets.
Accordingly, it would be preferable for the legislator, in recognition of the mediation tasks clearly assigned to the reorganization practitioner in Article XX.29/2 of the Code of Economic Law, to find room for a clearer reference to the qualities of an enterprise mediator that a reorganization practitioner needs to fulfil. One possibility might be to revise Art. XX.20/1. (Code of Economic Law, Book XX, Title I Chapter 14, Section 2) to recognize enterprise mediation as one of the capabilities that a reorganization practitioner needs to offer.
(1) Directive (EU) 2019/1023: Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132 (Directive on restructuring and insolvency).
Share us!
