Limits to privileged claims

Limits to privileged claims

A company (debtor) involved in reorganisation proceedings is in principle not protected against new claims that originate after the reorganisation proceedings have been opened (for further details please see "Reorganisation proceedings: access and possibilities"). Such new claims can be the result of both new contracts or the continuation of existing ones.

Enforcement of such new claims against debtors remains possible. If a company's reorganisation is unsuccessful and it is declared bankrupt or liquidated, such claims are considered 'privileged' in the framework of the subsequent liquidation. Such privileged claims will in principle be paid out before any other claim, providing them with so-called 'super priority'. However, this super priority often conflicts with the rights of other privileged or secured creditors.

On 22 February 2018 the Supreme Court delivered an important judgment regarding the relationship between privileged creditors in the framework of reorganisation proceedings and secured creditors in the event of a subsequent bankruptcy (for further details please see "Relationship between privileged and secured creditors").

This article addresses a separate judgment of 10 May 2019 in which the Supreme Court clarified possible conflicts in such liquidation scenarios.


To read the rest of the article; click here.


Bart Heynickx


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