Suspension of payments

Temporary protection in case of liquidity problems

Is your business facing acute payment issues, but is it still viable at its core? Then suspension of payment may provide a solution. This court-granted arrangement gives you temporary relief to get your affairs in order without creditors being able to immediately enforce payment.

What does suspension of payment entail?

Suspension of payment is a legal arrangement under which a business is granted temporary deferral for paying certain debts. The goal is to ensure the continuity of the business. During this period, you work towards a creditors' agreement wherein debts are restructured or spread out so that your business becomes future-proof again.

Note: suspension does not provide protection against all creditors. For example, the following are excluded:

• Tax debts;
• Salaries;
• Pledged or mortgaged claims (such as from financiers), outside the scope of the arrangement.

Acting timely is crucial

Suspension of payment only has a chance of success if you timely draft a realistic recovery plan and obtain the support of creditors. There must also be coverage for expected costs, including the costs of the administrator. If there is no prospect of an agreement, the suspension can quickly be converted into bankruptcy.

We therefore advise you on:

• The preparation of a request for suspension of payment;
• The communication with creditors and the administrator;
• The drafting of a concrete recovery plan or creditors' agreement;
• Guidance in restructuring or, if necessary, winding down your business.

Strategic and legally strong advice

Our specialists have extensive experience with businesses in distress. We think practically and swiftly with you about the best route: recovery, restructuring, or controlled termination.

Are you considering suspension of payment or want to know if this is suitable for your business? Then contact us for targeted legal advice.