February 2022: 736 bankruptcies

February 2022: 736 bankruptcies

In February 2022, 736 bankruptcies were registered by the business courts. This is an increase of 13.8% compared to January 2022.

Statbel, the Belgian statistical office, also publishes a detailed report (NL - FR) with the major developments of the monthly figures on bankruptcies. This report is available here.

The number of bankruptcies registered in February 2022 is higher than in the same month in 2021 (+47,5%) but lower than in February 2020 (-14,9%).

Compared to January 2022, the number of bankruptcies increased in the Flemish Region (+16,9%) and in the Walloon Region (+20,4%), but remained in both regions below the level of February 2020.

The number of bankruptcies registered in February 2022 increased in six sectors compared to January 2022. Of these six sectors, only ‘Industry and energy’ (38) recorded more bankruptcies than in February 2020 (33). Nevertheless, this number is lower than in February 2019 (50).

The number of jobs lost due to bankruptcies in February 2022 was 1,771. This represents a 4.8% increase compared to January 2022. However, fewer jobs were lost compared to February 2021 (-1.4%) and to February 2020 (-31.4%).

At regional level, the number of job losses increased compared to January 2022 in the Flemish Region (+18.4%) and in the Walloon Region (+14.5%). Only in the latter region did this number also increase compared to February 2021 (+12.5%) and February 2020 (+21.7%).

Compared to January 2022, the number of jobs lost increased in five sectors. Among the five sectors where the number of job losses increased, only ‘Information and communication’ (54) had more job losses than in February 2020 (52) and February 2019 (41). In the latter sector, one has to go back to July 2021 (92) to find a higher number of job losses as a result of bankruptcies.

In addition to this press release and the supplementary report (NL - FR), Statbel also publishes more detailed monthly figures which can be broken down by municipality, by NACEBEL 2008 class or even dated back to the year 2009. These bankruptcy figures are available on be.STAT via the "Figures" tab of this publication.

When interpreting these figures, account should be taken of the fact that there is a certain delay between the termination of the economic activity and the notification of bankruptcy by the business court. As a result, the economic impact is only reflected in the figures after a certain period of time.

Moreover, because of the Covid-19 crisis, many business courts and registries operated at reduced capacity and limited their activities until 18 May 2020. Furthermore, a royal decree leading to the freezing of bankruptcy proceedings before the courts was in force until 17 June 2020, in order to protect the enterprises that were healthy before 18 March 2020 from the effects of the Covid-19 crisis.

Then, on Friday 6 November 2020, the government approved a new moratorium on bankruptcies until 31 January 2021 in order to protect enterprises that were obliged to temporarily close their doors following the ministerial decree published on 1 November 2020 amending the ministerial decree of 28 October 2020 on emergency measures to limit the spread of the coronavirus (Covid-19).

As compensation for the end of this second moratorium, the federal government implemented a reform based on 3 pillars in order to make the access to the procedure for judicial reorganisation more flexible. First, the procedure was simplified by no longer requiring enterprises to immediately submit 11 documents, but only 3. The other documents can be delivered during the procedure. Second, the procedure no longer requires a publication in the Belgian Official Journal. This enables the mediator to meet with the creditors in complete discretion and thus prevent them from demanding a rapid repayment of their claims before an agreement has been reached. Third, the procedure for judicial reorganisation by amicable agreement is encouraged by a tax exemption which, until then, only applied to procedures for judicial reorganisation by court order. The provisions relating to the first two pillars of the reform would initially be in force up to and including 30 June 2021, but were extended until 16 July 2022 by the Royal Decree of 24 June 2021 extending Articles 2, 4 and 12 of the law of 21 March 2021 amending Book XX of the Code of Economic Law and the Income Tax Code 1992.

Between these two moratoriums, the FPS Finance and the NSSO spared, by a de facto moratorium, enterprises by not declaring them bankrupt due to tax and social debts. This system also remained in force after 1 February 2021 until October 2021 as far as the NSSO is concerned, while it is still in force for the tax authorities.

Moreover, there is the judicial recess in July and August. Courts remain open during this period but the number of hearings is reduced. This is why our figures on bankruptcies are usually lower during this period.

Finally, many measures are also currently in force - at federal, regional and local level - to support enterprises in these times of crisis. For example, the NSSO grants amicable payment plans with a maximum duration of 24 months for the payment of all contributions and sums due for the year 2020. At the level of the National Employment Office, the entire temporary unemployment due to the coronavirus can be considered as temporary unemployment due to force majeure ‘corona’ until 31.03.2022.

All these public measures described above have had a moderating impact on the number of bankruptcies declared since March 2020.