Company conciliation
Last update
Summary:
Facilitate the process of reaching a confidential agreement between a business facing financial hardship and its creditors, with a view to preventing cessation of payments.
The purpose of the conciliation process is to foster discussions between a business facing financial hardship and its creditors, and to provide a confidential framework for reaching an amicable agreement. The agreement could provide for a reorganisation of the business's debts, or even the transfer of some of its assets in order to improve its financial situation.
Who is concerned
Conciliation is available to:
- traders;
- commercial companies;
- craftspeople; or
- civil companies (sociétés civiles).
A trader is any natural or legal person who:
- engages in commercial operations; and
- does so in a professional capacity.
Prerequisites
Your business must be facing a demonstrable or predictable situation of financial hardship, but must not yet be in cessation of payments. It must be in a position to honour its debts despite its short-term difficulties.
Costs
The company conciliator's fees must be paid by the business facing financial hardship.
How to proceed
Filing an application
Conciliation is voluntary.
You, as the debtor, must file an application for conciliation with the Ministry of the Economy (Ministère de l'Économie). Applications for conciliation are handled by the 'Assessment unit for businesses in difficulty' (Cellule d'évaluation des entreprises en difficulté - CEVED.
In your application, you must:
- explain why you are applying for conciliation; and
- specify the goals that you wish to achieve (for instance, the reorganisation of your debts, or negotiations with your creditors).
The application is not subject to any specific formal requirements.
Appointment of a conciliator
The procedure requires the appointment of a conciliator, who is generally selected from a list of court-sworn experts. You may also submit the name of a conciliator. The conciliator is appointed by way of a ministerial decree issued by the Ministry of the Economy.
Conciliator's role
The conciliator's role is to facilitate negotiations between the business and its creditors, with a view to reaching an amicable agreement.
Scope and duration of the conciliator's assignment
To understand the scope and duration of the conciliation process, it is important that you have a clear idea of what you hope to achieve through this procedure. You should also bear in mind that:
- it does not have an immediate suspensory effect: the conciliation process does not automatically suspend the proceedings being brought against your business by your creditors;
- it is a confidential procedure: the conciliation process is completely confidential. This means that those debtors who are not be involved in the process will not be informed of the contents of the agreement.
The conciliator's mission may be extended. The law provides that the CEVED may extend the conciliator's assignment if you request that this be the case, especially if you would like the conciliator to assist you in implementing the agreement reached between your business and your debtors.
The CEVED's role in the conciliation process
The CEVED's role in the conciliation process is restricted to appointing the conciliator put forward by the business. If you do not put forward a conciliator, the Ministry will provide you with a list of experts and ask you to select one.
Amicable agreements do not require a judge's endorsement.
The purpose of the conciliation process is to foster discussions between a business facing financial hardship and its creditors, with a view to reaching an amicable agreement.
To convince the creditors to support the business financially during the conciliation process, the amicable agreement does not require a judge's endorsement. In concrete terms, this means that the agreement is not binding upon the creditors with whom the agreement was reached if the agreement fails to rescue all the business's assets or its operations.
Who to contact
Ministry of the Economy Assessment unit for businesses in difficulty
- Address:
- 19-21 boulevard Royal L-2449 Luxembourg Luxembourg
- Phone:
- (+352) 74 700
- Email address:
- ceved@eco.etat.lu
- Website:
- https://meco.gouvernement.lu/fr.html
Related procedures and links
Related procedures
Links
Legal references
- Code de Commerce
-
Loi du 7 août 2023
relative à la préservation des entreprises et portant modernisation du droit de la faillite
