A new law modernising Luxembourg's old fashioned bankruptcy laws took effect on 1 November 2023. The most relevant upgrades can be summarised as follows:
- creation of new admnistrative and judicial reorganisation proceedings designed to allow a distressed debtor to restructure its operations and negotiate a rescue plan with its creditors, through i.a. the setting up of a moratorium on the collection of debts by creditors or a restructuring plan that may involve changes to the debtor's capital structure, business operations, or contracts with creditors (debt restructuring, asset sale, corporate restructuring, ...);
- accompanied by creditor protection measures, which, among others, grant the ability for creditors to request (i) the opening of bankruptcy proceedings in the event of a violation of a safeguard measure, (ii) the appointment of a judicial administrator to oversee the management and assets of the debtor or (iii) the liquidation of the assets of the debtor.
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