The COVID-19 pandemic has had a significant impact on the bankruptcy and restructuring space. Though virtually every industry has been affected by the crisis, with businesses shuttered amid lockdowns and social distancing measures, the glut of insolvencies that one might expect has not materialised, thanks largely to government support.
Please see below how Eight International team in the Benelux, namely Philippe Fimmers, Partner at EIGHT ADVISORY, Vincent van Liere, Partner at EIGHT ADVISORY, and Olivier van Nes, Senior Manager at EIGHT ADVISORY, assesses the situation in Belgium and the Netherlands for the Financier World Magazine:
“Belgium saw a record low number of bankruptcy cases following the numerous measures taken by the government to keep the economy going through the COVID-19 crisis. These measures included temporary unemployment, COVID-19 loan guarantees, loan extensions and extensions to VAT and social security payments. This support has created a situation whereby underlying failing businesses, which normally would have already failed, are able to continue as a going concern. This situation should resolve itself once government support ends and the true underlying damage to the economy becomes apparent.”
“In the Netherlands we have seen a relatively low number of bankruptcy cases. Although the impact on businesses in a wide range of sectors has been fierce, the Dutch government’s support measures have reduced the number of insolvencies. However, recent insolvency figures do not tell the full story: unfortunately, many companies, entrepreneurs and their employees face huge financial difficulties and concerns. To date, the Dutch government has been able to provide companies with all kinds of support to overcome the crisis. One measure has been tax postponement – we estimate that around €20bn has been postponed since Q1 2020.”