The numerous crisis measures taken against the spread of the COVID-19 virus have hit the economy hard. Companies’ cash reserves are obviously limited and the total or partial disappearance of their income may threaten their continuity.
Measures taken to relieve business cash flow (see our article here) are not always enough to ensure their continuity.
Moreover, the government wanted to avoid systematic recourse to the judicial reorganisation procedure (PRJ), which would represent an undesirable overload for the company courts (see our article on the PRJ).
The government has therefore opted for a legal measure that is generally applicable to businesses within the meaning of book XX of the CDE, provided they are affected by the consequences of the epidemic or the COVID-19 pandemic. The regime corresponds to a temporary moratorium during which any debtor company is in principle protected against protective and enforceable seizures and any declaration of bankruptcy (or judicial dissolution).
Above, you will find a summary of these government measures, which are the result of the Royal Special Powers Order No. 15, of 24 April 2020.
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