The Belgian court of appeals rejected the company's second restructuring plan and lifted bankruptcy protection.
L&H faces liquidation on the day it was planning to sign a deal for the sale of part of its core speech and language technology business.
"We had received a binding offer and were planning to sign on 19 October," a company spokesman said. "We will now get around the table with the prospective buyer to avoid bankruptcy and to come to a transaction."
The US-based company, SpeechWorks International, paid $12.5m (£8.76m) for part of L&H, according to the Belgian daily newspaper, de Financieel Economische Tijd.
L&H, however, declined to confirm the name of the prospective buyer. SpeechWorks could not be reached for comment.
L&H had appealed against the conditions of the nine-month extension of the bankruptcy protection period that was granted by a Belgian court late last month.
The court set two major conditions when it extended the bankruptcy protection period for L&H. Transfer of core L&H activities had to guarantee long-term economical activity and substantial employment in Belgium, and at least 80% of the gross income from asset sales was to be reserved to pay off creditors. L&H at the time called the conditions "stringent".
L&H continues to operate under Chapter 11 bankruptcy protection in the US, but this protection does not extend to the company in Belgium.
The Belgian-US speech technology vendor went into a tailspin last year after a series of financial irregularities were uncovered. L&H filed for bankruptcy protection late last year.