COVID-19 insolvency emergency measures in the Netherlands

The Dutch Government has announced it will be helping out entrepreneurs with all sorts of plans. These plans mainly consist of tax-friendly measures and labour law measures. Thousands of companies have applied for so-called "working time reduction".

Now, this measure has been stopped and a new tailor made regulation has entered into force called Temporary Emergency Bridging Measure for Preservation of Employment Opportunities.

Because of the coronavirus crisis, the Dutch Ministry of Justice initially decided to close all district courts, courts of appeal and the High Court for non-urgent matters from Tuesday 17 March 2020 until Monday 6 April 2020.

However, from the beginning, insolvency cases were considered urgent cases. As of 7 April 2020, a new General Regulation for Court Hearings has been put in effect, which aims for continuation of court hearings as much as possible under strict precautionary measures, such as:

• keeping distance between all parties and the court
• not allowing public access, and
• using video connections as much as possible.

This term can be prolonged if an adequate fight of the virus requires so. Until now, the Dutch authorities have not installed specific coronavirus- related insolvency regulations, apart from an addition to the insolvency procedure rules.

When considering the requests for bankruptcy, the District Court has to take into account the relevant, coronavirus-related) circumstances. The judge has to make an assessment about the importance of legal protection and protection against abuse of the situation. In short, the judge should take COVID-19 into account when rendering an insolvency verdict.