On 01 July 2015, Belgium adopted a new Act relating to the fight against the activities of "vulture funds".
On 01 July 2015, Belgium adopted a new Act (the Act) relating to the fight against the activities of “vulture funds”. The Act must still be published in the Belgian Gazette before it enters into force.
Under the Act, any creditor which is determined by a Belgian judge to be acting as a "vulture" (ie which pursues an "unfair benefit" by purchasing government bonds/receivables) cannot claim more than the discounted price paid for the bonds/receivables. Moreover, no enforcement title can be obtained in Belgium and no protective or enforcement measure can be taken in Belgium by such creditor in connection with a payment to be received in Belgium if such payment is procuring an unfair benefit vis à vis the creditor. This rule applies regardless the law applicable to the relation between the creditor and the debtor State.
Pursuing an unfair benefit can be inferred from the existence of a clear disproportion:
- between the price paid for purchasing the bonds and their face value, or
- between the purchase price of the bonds and the sums claimed by the creditor.
Such unfair benefit must be supplemented by at least one of the following criteria:
- the debtor State was insolvent, or nearly insolvent, when the bonds were purchased
- the creditor is established in a non-cooperative country
- the creditor systematically uses legal proceedings to obtain the reimbursement of the bonds or the reimbursement of bonds previously purchased
- the debt of the debtor State has been restructured and the creditor has refused to participate in such restructuring
- the creditor abused the weak position of the debtor State to negotiate a repayment agreement which is clearly unbalanced, or
- the full repayment of the sums claimed by the creditor would have an identifiable, negative impact on the public finances of the debtor State and could jeopardise the socioeconomic development of its population.