Learnlight, a global EdTech player and a SYNOVA portfolio company, strengthens its position as a leading provider of blended and virtual training solutions through the acquisition of BLCC.

The Racine deal team was led by Partner Anthony Van der Hauwaert, with support from Alexis Debier and Katrien De Vos.

For more information, see https://www.learnlight.com/en/articles/learnlight-acquires-belgian-language-training-provider-blcc/

The post Racine assist Learnlight in the acquisition of Business Language and Communication Centre first appeared on Racine.

The impacts of rising interest rates and persistent inflation are taking an increasing toll. Recently, influencer platforms Influo and Connus, dark kitchen Casper, crypto platform Bit4You, and job platform Karamel.career have gone bankrupt. Other startups are quietly sold (often for a pittance) to avoid public humiliation or bankruptcy.

Investment Tips for Startups

1. Caveat Emptor: whether it’s a crowd loan, win-win loan, convertible loan, or direct equity investment, do your due diligence before investing in a startup. Assess the risks. Do not rely solely on the information provided by the involved company or mandated broker.
2. Diversify your investments: typically, only a small percentage of startups succeed. This remains risk capital. Do not forget this.
3. Be proactive and monitor your investment: ask questions and insist on regular updates.

What to do if things start to go wrong?

As a creditor:

• Consider suspending deliveries or requiring advance payments. Assess your recourse options (retention of title, pledge).
• If there is still trust, consider converting your claim into equity to gain (more) control over the startup.
• Do not forget to timely file your claim (in judicial reorganization or bankruptcy).

As a director:

• If the continuity of a company is at risk, directors must intervene in a timely manner (e.g., apply the alarm bell procedure or mandatory filing for bankruptcy upon meeting insolvency conditions).
• There are various avenues to consider for rectifying the situation, such as restructuring, selling shares or assets, restarting via judicial reorganization, liquidation, silent bankruptcy, and bankruptcy. This requires thorough planning and advice.
• Do not forget your directors’ liability insurance.
• Decisions made in the months leading up to a bankruptcy can affect potential director liability afterward. Directors should not take this lightly.

As an investor:

• Typically, investors are left empty-handed. Startups usually have little tangible fixed assets, and investors are among the last to be paid in a restructuring or bankruptcy.
• In the case of a win-win loan, a certain percentage of the investment can be recovered from PMV or the government through a tax credit in case of default. If the conditions for the received tax benefits are not met, the win-win investor risks losing these benefits.
• In case of manifest errors, the board can potentially be held liable, but this is less straightforward for startups due to the inherently risky nature of such ventures.

Seek proper guidance

The documentation regarding an investment in a startup is often complex, and not everyone understands the legal jargon or knows their rights. Insolvency is a distinct area of law that is rapidly evolving. It is advisable to seek guidance from an experienced lawyer at the time of investment or during restructuring.

Need assistance?

Do you have questions about investing in a startup? Are you a company in difficulty, a director, an investor, or a creditor of a struggling company? Do not hesitate to contact us. We have extensive expertise and are happy to assist you.

Anthony Van der Hauwaert, lawyer – partner | Racine

The post Navigating startup bankruptcies: risks and investor advice first appeared on Racine.

Racine is proud to have assisted European production and distribution firm Fremantle in the acquisition of a majority stake in A Team Productions, the Belgian firm behind films Patser, Yummy and Baghdad Messi.

With the acquisition, Fremantle strengthens its position in the Belgian scripted market and invests in the growth of its international scripted portfolio of films and drama series. A Team Productions is led by talented duo Kobe van Steenberghe and Hendrik Verthé. They will work closely with Dave Heuten, CEO of Fremantle Belgium.

The Racine deal team consisted of partner Anthony Van der Hauwaert and Sien Vermeesch.

Read press coverage here and here.

The post Racine assists Fremantle with majority investment in A Team Productions first appeared on Racine.

To address this issue, the so-called “basic banking service for companies” was already inserted in the Belgian Code of Economic Law (CEL) on 8 November 2020, in Article VII.59/4 et seq. CEL. To date, however, this law has had little impact in practice, as there was a need for an implementing decree. This implementing decree has finally arrived!

On 16 January 2023, the Royal Decree of 16 December 2022 on the basic banking service for companies was published in the Belgian Official Gazette.

What is covered by the term basic banking service?

The term “basic banking service” means so-called “payment services” within the meaning of Art. I.9,1°,a b, or c CEL. These include for example, opening accounts, placing and/or withdrawing cash and carrying out payment transactions. It does not include more complex transactions, such as entering into credit agreements or other possible forms of financing.

Who is entitled to the basic banking service?

Any enterprise established in Belgium and registered in the Crossroads Bank for Enterprises or applying for registration is entitled to the basic banking service. The only condition imposed is that three different credit institutions must have refused to provide the enterprise with a minimum service.

Note that this is not an absolute right. The basic banking service can be refused in certain exhaustively listed cases, such as, for example, a conviction of a member of the company’s statutory governing body for fraud, forgery, etc.

Which banks offer the basic banking service?

Every year, the National Bank of Belgium publishes a list of systemically important institutions required to offer the basic banking service. In 2023, these are the six following institutions:

(i)     BNP Paribas Fortis

(ii)    KBC Group

(iii)  Belfius Bank

(iv)  ING Belgium

(v)    Argenta

(vi)  Axa Bank Belgium

How to apply for basic banking services?

The enterprise wishing to apply for basic banking services will have to do so via an application form that will be provided by the FPS Economy and/or the so-called Chamber of Basic Banking services. The application form is addressed to the Chamber of Basic Banking services. This Chamber of Basic Banking Services is responsible for appointing the basic banking service provider. It is composed of two civil servants and four members with special expertise in payment services, who may not be civil servants. The members were appointed by Ministerial Decree of 31 January 2023.

As soon as the application has been declared admissible, the Chamber of Basic Banking Services sends the application file to the Financial Intelligence Processing Unit, which will issue an opinion. After obtaining this opinion – or in the absence of a negative opinion within sixty calendar days – the Chamber of Basic Banking Services has a period of two months to decide whether or not to designate a basic banking service provider to the enterprise.

The Royal Decree of 16 December 2022

Since 28 February 2023, it is officially possible to apply via the following link: Basic banking service for businesses and diplomatic missions | FPS Economy (fgov.be) . The application can be submitted either by a legal representative of the company or by an agent (e.g.: a lawyer or accountant).

Do you have any further questions regarding this basic banking service or wish to be assisted in applying for the basic banking service? Our corporate team is always ready to assist you further in this regard!

The post The long-awaited Chamber of Basic Banking Services is finally here! first appeared on Racine.

Racine is proud to have assisted the shareholders of decorative wood panel wholesaler Gesibois with the combination of their activity with that of Vanrobaeys and their subsequent reinvestment in the combined group company Wopaco, one of the portfolio companies of the private equity fund Sofindev.

The combined group will realize about € 75 million in revenue with more than 100 employees, operating from two locations, in Izegem and in Sint-Pieters-Leeuw, leading to one of the largest specialized wholesalers of decorative wood panels in Belgium.

The Racine deal team consisted of Anthony Van der Hauwaert and Sien Vermeesch.

Read press coverage published by De Tijd.

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BMC Benelux is one of the largest builders’ merchants in Belgium operating under the Youbuild and Mpro brands and owned by German PE fund Aurelius.

Vandevoorde Bouwmaterialen is a family owned building materials merchant based in Wortegem—Petegem.

This acquisition follows the acquisition earlier this year of builders’ merchant De Rycke which Racine also successfully supported.

Press coverage can be found here.

The post Racine assists BMC Benelux with the acquisition of Vandevoorde Bouwmaterialen first appeared on Racine.

Racine Brussels is proud to have assisted leading Belgian dental clinics group Odontolia (majority owned by DLF Venture, the private equity vehicle of family de Mévius) on the minority investment by French PE fund Siparex.

Odontolia is a leading and fast growing Belgian dental group operating 36 dental clinics across Belgium.

Racine provided Odontolia with vendor due diligence support and the negotiation of all transaction documentation. The Racine team was led by partner Anthony Van der Hauwaert with the support of Sien Vermeesch and Alexis Debier.

Read press coverage published by l’Echo and De Tijd.

The post Racine assists Odontolia on investment by French PE fund Siparex first appeared on Racine.

Racine Brussels advised and assisted Lecluyse, a Belgian family owned company established in 1958 active in the production of window blinds, with the acquisition of the French blinds business of Solar Screen, Europe’s largest distributor of self-adhesive films.

The Racine team was led by partner Anthony Van der Hauwaert with the support of Sien Vermeesch and Alexis Debier.

The post Racine assists Lecluyse with the acquisition of Solar Screen France first appeared on Racine.

The retail park encompasses ca. 10,000 sq.m. of shopping area divided over 9 stores and is let to chains such as Carrefour, Hubo, JYSK, Vanden Borre Kitchen, Impermo, BNP Paribas and Sushiworld.

Read press release.

This transaction follows the earlier acquisition this year of the shares of Immo Bree Invest nv, the company controlling the Gerkens retail park in Bree.

Gerkenspark encompass together ca. 11,500 sq.m. of shopping area divided over 9 stores, including Jumbo, McDonald’s, Jysk, X2O, Torfs, ZEB, vanHaren, Yess! and Impermo.

More at: https://www.pertinea.com/news/bree-draft/

Racine assisted Pertinea on both transactions with a multidisciplinary team led by partner Anthony Van der Hauwaert with the support of Stijn Claeys, Sien Vermeesch, Arne Baert, Joeri Leten and Alexis Debier.

We would also like to thank the colleagues at Cazimir for their tax support.

The post Racine assists Pertinea Property Partners on two of its latest acquisitions first appeared on Racine.

The Belgian legislator has very recently approved new legislation that marks a new step in the regulation of cryptocurrencies. It concerns, on the one hand, the Law of 1 February 2022 amending the Law of 18 September 2017[1] which entered into force on 21 February 2022 (the “AML Act”) and, on the other hand, the Royal Decree of 8 February 2022[2] which will enter into force on 1 May 2022 (the “Royal Decree”). The main features of the new legislation can be summarized as follows:

1.       A further extension of the scope of the anti-money laundering Law[3] to all ATMs located on Belgian territory;
2.       A prohibition for non-EEA persons to provide crypto services on the Belgian territory;
3.       A legal framework that defines the conditions that cryptocurrency service providers must meet (the registration requirement).

This article addresses the 3 different features of aforementioned legislation.

2.       Expanding the scope of the anti-money laundering law

On 19 June 2018, the Fifth European Anti-Money Laundering Directive appeared in the European Official Journal.[4] This directive extended the personal scope of the legislation to providers of services related to exchange transactions between virtual and fiduciary currencies and providers of crypto wallets, hereafter referred to as “crypto service providers”. The fifth Anti-Money Laundering Directive was transposed into the Belgian anti-money laundering Law through the Act of 20 July 2020 containing various provisions to prevent money laundering and the financing of terrorism and to restrict the use of cash.

The Belgian anti-money laundering Law stipulates, since the implementation of the aforementioned directive, that crypto service providers are required to register with the supervisory authority, the FSMA, before they can offer their services on Belgian territory. The problem here is that, in accordance with the territorial scope of the anti-money laundering Law, only those providers established in Belgium are subject to the law. The providers of crypto services that do not have a branch office, nor a permanent establishment in Belgium escape from the registration obligation and the control of the FSMA. De facto, this means that many actors in the crypto sector escape the registration obligation, including, for example, providers using so-called “ATMs” (Automated Teller Machines).

Indeed, according to the case law of the Court of Justice of the European Union, ATMs are not necessarily considered to be a permanent establishment. Such ATMs therefore only fall under the FSMA’s supervisory authority if they are operated by a person or company governed by Belgian law or by the law of another EU member state, which has a permanent establishment in Belgium. In other words, foreign providers operating these ATMs are not subject to any control in Belgium.

The solution provided by the AML Act is to equate ATMs to a permanent establishment. As a result, crypto service providers who offer their services through an ATM located on Belgian territory will also be deemed to be established in Belgium and therefore be required to register with the FSMA.

3.       Prohibition of crypto service providers from third countries

The second major innovation is that providers of crypto services governed by the law of a third country will be prohibited from offering such services as a professional activity. Third countries are defined in the anti-money laundering Law as any state that is not a member of the EEA. Again, the reasoning here is that providers of such services would not be subject to Belgian law if they are not physically established in Belgium. In other words, providers of crypto services from third countries may not offer their services here because Belgium cannot control them.

Such a ban is obviously very far-reaching. However, the Belgian legislator justifies its decision by stating that this ban has also been introduced in Dutch legislation and that the same ban is also being considered at the European level in the planned Markets in Crypto Assets (“MiCa”) regulation[5], which will introduce an overall European framework for the regulation of cryptocurrencies. So we could say that the Belgian law is proactive, even though the “MiCa” regulation has not yet been formally adopted.

4.       The registration requirement

Already discussed above was the obligation for crypto service providers based in Belgian territory to register with the FSMA.

In order to register with the FSMA as a provider of crypto services (and consequently to be able to offer their services on Belgian territory), providers will have to comply with strict conditions. These include the requirement of using specific corporate forms, minimum capital requirements, fit & proper criteria for the management and certain shareholders of the crypto service providers, appropriate governance structures, etc. The FSMA has supervisory power over registred providers.

As already mentioned, the Royal Decree will enter into force on 1 May 2022. Providers of crypto services that already offer their services in Belgium and have a physical establishment on the Belgian territory before 1 May 2022, may continue to offer their services if:

·         they notify their activity to the FSMA before 1 July 2022, and
·         they submit a full registration file to the FSMA by 1 September 2022.

5.       Criminal Sanctions

Finally, it is important to note that the AML Act introduces new criminal penalties into the anti-money laundering law.

If a crypto service provider subject to registration offers services without being registered with the FSMA, this provider risks a prison sentence of one month to one year and/or a fine of EUR 400 to EUR 80,000. An identical criminal sanction is provided for providers governed by the law of a third country who violate the prohibition on providing their services on Belgian territory.

6.       Conclusion

The goal of crypto currency regulation is to protect the user of crypto services as best as possible. We can say that the legislative intervention that we discussed contributes to this objective. From now on, crypto service providers will only be able to offer their services on Belgian territory if they meet the conditions for registration with the FSMA. Moreover, once they are registered with the FSMA, they will be subject to strict supervision. Providers governed by the law of a non-EEA country are no longer permitted to offer their services on Belgian territory.

Crypto service providers will therefore have to assess whether they can continue to offer services in Belgium and, where applicable, prepare for registration with the FSMA.

For more information on this subject, you can always reach out to one of our lawyers of the corporate practice group.

[1] Law of 1 February 2022, amending the Law of September 18, 2017, on the prevention of money laundering and the financing of terrorism and on restricting the use of cash to introduce provisions around the status and supervision of providers of virtual currency and fiduciary currency exchange services and providers of custodial wallets, Official Gazette February 11, 2022, 9.941.
[2] RD of 8 February 2022 on the status and supervision of providers of virtual currency and fiduciary exchange services and providers of custodial wallets, Official Gazette February 23, 2022, 16.166.
[3] Act of 18 September  2017 on the prevention of money laundering and terrorist financing and limiting the use of cash, Official Gazette October 6, 2017, 90.839.
[4] Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU.
[5] Proposal (Comm.) for a Regulation of the European Parliament and of the Council on crypto asset markets and amending Directive (EU) 2019/1937, 24 September 2020, COM(2020) 593 final 2020/0265 (COD) (https://eur-lex.europa.eu/resource.html?uri=cellar:f69f89bb-fe54-11ea-b44f-01aa75ed71a1.0007.02/DOC_1&format=PDF )

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