Clawback: chasing assets

Clawback: chasing assets
December 13, 2019

This article reflects on some of the options offered under Belgian law by the actio pauliana, commonly referred to in English as the ‘clawback’ rules (for further details please see “Reservation of title: legal guidelines and practical tips” and “Administrator liability in bankruptcy framework“).


Outside bankruptcy, Belgian law provides for a (general) actio pauliana (Article 1167 of the Civil Code).

If a creditor can prove that they are disadvantaged by a legal act which their debtor has fraudulently committed (after the creditor’s claim arose) and in which the third party to the legal act was acting in bad faith or obtained an asset free-of-charge, then the legal act in question can be declared unopposable to the (aggrieved) creditor.

The typical example is a company-debtor that, shortly before its creditor’s enforcement measures come into effect, quickly impoverishes the company’s assets by transferring important assets (either for free or at a low price) to subsidiaries, or directors or business managers.

Extreme cases involve full asset-stripping.

The aggrieved creditor can try to obtain payment by invoking directors’ liability.

However, in such cases, the (aggrieved) creditor will also be able to claim that the legal acts in question are declared unopposable to them so that they will be able to execute the disposed assets as if they still belonged to the assets of their direct debtor (ie, the company).

Only if the third-party acquirer acted in good faith and paid a (correct) remuneration for the acquired asset will the acquirer be protected.

Among other things, the creditor can, after having obtained court permission to do so, attach the disposed assets directly with the third party.


Following the debtor’s bankruptcy, Article XX.114 of the Code of Economic Law provides for a special ‘bankruptcy actio pauliana‘.

Contracts or payments entered into with fraudulent prejudice to the rights of the creditors cannot be invoked against the bankrupt estate. The moment at which these legal acts were performed is irrelevant in this respect, so that acts committed (long) before the bankruptcy can also be targeted. All types of legal act are eligible (eg, donations, sales at a low price, any contribution to other companies and the granting of new securities).

However, these claims can only be launched by the bankruptcy trustee. In addition, fraud must be proven. It concerns a ‘knowledge’ or ‘ought to know’ that the legal act in question compromised the rights of the bankrupt estate’s creditors.

Contrary to the general actio pauliana mentioned above, non-preferential creditors will have little interest in this claim as it is unlikely that they will benefit from it. Further, demonstrating fraud can be difficult.

In this context, Book XX of the Code of Economic Law also contains special provisions which do not require proven fraud.

For example, Article XX.111 of the Code of Economic Law stipulates that legal acts in which movable or immovable property is transferred free of charge or at a very low price are not enforceable against the bankrupt estate if they have been performed following the day of the cessation of payment. The same applies to the payments of debts that are not yet due and payable or to the establishment of new mortgages or pledges for old debts.

Other legal acts (ie, not free of charge or at a low price) may be declared unopposable if those parties that have received something from the debtor or have dealt with them were aware of the cessation of payment (Article XX.112 of the Code of Economic Law).

These provisions (Articles XX.111 and XX.112 of the Code of Economic Law) therefore do not require fraud, but limit the period during which the legal acts can be questioned to the suspect period (ie, a maximum of six months before the bankruptcy in Belgium). In addition, some exceptions are provided for if the legal acts were part of the debtor’s reorganisation.


The legal form of the actio pauliana offers options for creditors which are confronted with debtors that are disposing of important assets or organising their insolvency.

Prior to bankruptcy, the creditors concerned can take direct action (eg, by means of a precautionary actio pauliana attachment).

The retrieval of the assets in question will be essential before an effective attachment can be put in place.

Written by

  • Bart Heynickx


Recommended articles

August 22, 2023

New insolvency landscape on the horizon: more options for companies to reorganise and restructure

Belgium had accumulated a significant legislative backlog within insolvency law. The European Directive 2019/1023 on restructuring had to be transposed into national law by the member states by 17 July 2022 at the latest. The Belgian government did not submit a draft bill to this effect until 20 March 2023. This draft has since been voted into law and will enter into force on 1 September 2023.

Read on
November 30, 2022

Heiploeg’s impact on Belgian insolvency law

The European Court of Justice’s (“ECJ”) Plessers judgment seemed to cause a serious threat for the applicability of the Belgian reorganisation procedure by transfer under judicial supervision, and the right of the interested buyer of the debtor’s activities to choose which particular employees it would take over. But, in the end, it has turned out to be “much ado about nothing”.

Read on
December 17, 2021

No automatic liability for directors who do not ring the alarm bell

On 16 September 2021, the Antwerp Court of Appeal ruled on the liability of the directors of a company that did not respect the so-called ‘alarm bell procedure’.

Read on