LUXEMBOURG Law and Practice Contributed by: Laure-Hélène Gaicio Fievez, Fabio Trevisan and Carolina Vasselli, BSP
BSP 11, rue du Château d’Eau L-3364 Leudelange Luxembourg Tel: +352 26 025 1 Fax: +352 26 025 999
Email: mail@bsp.lu Web: www.bsp.lu
1. Overview of Legal and Regulatory System for Insolvency/Restructuring/ Liquidation 1.1 Legal Framework The general insolvency regime is regulated by the fol - lowing: • Commercial Code – Section III, Articles 437 to 614, dealing with stay of payments and insolvency proceedings; • New Insolvency Law – formally known as the Law of 7 August 2023 on the business preservation and modernisation of insolvency law (the “Law of 7 August 2023”); • Regulation (EU) 2015/848 – Regulation of the Euro - pean Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) (the “EU Insol - vency Regulation (Recast)”), which replaces the previous Regulation (EU) 1346/2000 for insolvency procedures opened after 26 June 2017; and • Grand Ducal Regulation of 4 July 2025 regulat - ing the electronic communication of documents and notifications in bankruptcy and reorganisation proceedings. Specific Insolvency Regimes or Provisions In addition to the general framework, specific insol - vency regimes or provisions exist for the following sectors. • Credit Institutions and Financial Profession - als – Law of 18 December 2015 covers resolu - tion, recovery and liquidation measures for credit institutions and certain investment firms, as well as
deposit guarantee schemes and investor indemnifi - cation (as amended). • Insurance and Reinsurance Undertakings – Law of 7 December 2015 governs the insurance sector (as amended). • Regulated Investment Funds and Fund Managers – (a) Law of 15 June 2004 relates to investment companies in risk capital (SICAR) (as amend - ed); (b) Law of 13 February 2007 on specialised invest - ment funds (as amended); (c) Law of 17 December 2010 pertains to under - takings for collective investment (UCIs) (as amended); and (d) Law of 23 July 2016 on reserved alternative investment funds (RAIFs) (as amended). • Regulated Securitisation Vehicles and Affiliates – Law of 22 March 2004 governs securitisation (as amended). 1.2 Types of Insolvency Insolvency Under Luxembourg law, insolvency ( faillite ) is declared when a debtor fails to meet two crucial criteria in the following manner: (i) the inability to pay its debts as they become due; and (ii) the loss of its creditwor - thiness. The debtor must file for bankruptcy within a month after the debtor becomes unable to pay its debts as they come due. However, this obligation to declare bankruptcy can be suspended from the moment a petition for judicial restructuring is filed and lasts until the standstill expires.
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