A company can be insolvent. Its business can be perfectly viable.

A company can be insolvent. Its business can be perfectly viable.


Most directors hear "transfer under judicial authority" and read it as a death sentence. It is closer to the opposite: the legal instrument designed to let a viable business outlive the insolvency of its current owner.

The confusion is understandable. The procedure carries the vocabulary of failure — court, judicial agent, creditors — and directors instinctively equate it with the end. So they cling to a structure that can no longer be saved, and let the one activity that still had value go down with the balance sheet that was sinking it.

Belgian law treats the two as separate questions. Under Book XX of the Code of Economic Law, the judicial reorganisation by transfer under judicial authority answers the only question a serious acquirer asks: "Can I take over what works without inheriting what doesn't ?"

The mechanism rests on three pillars :

1. The business passes; the liabilities largely stay behind. The transfer conveys all or part of the undertaking as a going concern — its activity, its assets, its operating contracts, its workforce — to a third party. The pre-existing debt, as a rule, remains in the transferring estate. The acquirer buys the capacity to operate, not the accumulated history. That single distinction is what makes a distressed business sellable at all.

2. A court-appointed agent runs the sale. The enterprise court designates a judicial agent to organise and execute the transfer — soliciting offers, enforcing transparency, and arbitrating between price, continuity of the activity, and preservation of employment. The process is supervised, not improvised. For the buyer, that supervision is not a constraint; it is what delivers a clean, defensible title that holds up afterwards.

3. Employment is the objective — and the takeover is structured around it. The continuation of the business and of its jobs is the explicit purpose of the procedure. The transferee selects the employees taken over on technical, economic and organisational grounds, within the protective framework that governs transfers of undertaking — never on prohibited discriminatory ones. The law balances the acquirer's viability against social protection rather than sacrificing one to the other.

The strategic lesson is straightforward. In a distressed company, the business and the balance sheet are not the same asset. One can be insolvent while the other is entirely viable. The transfer under judicial authority exists precisely to separate them — to let the activity, the clients, and the jobs cross over to a structure that can carry them, while the legacy debt stays where it belongs.

But the instrument only works on a business that is still operating. A going concern can be transferred. A stopped one can only be liquidated. The window, again, closes the moment the activity does.