Author
Ralf van der Pas

Ralf van der Pas

Partner

Read More
Author
Ralf van der Pas

Ralf van der Pas

Partner

Read More

17 June 2020

Lending Focus - June 2020 – 5 of 6 Insights

Revolutionary insolvency scheme to emerge from the Netherlands

  • QUICK READ

A new scheme providing for out-of-court restructurings which can 'cram down' creditors and/or shareholders has been published by the Dutch legislator, and is expected to enter into force in the Netherlands during the course of 2020. This model scheme will not require full court hearings; only confirmations.

The scheme aims to be a swift and cost-efficient restructuring procedure, inspired by elements of the UK scheme of arrangement model and the US Chapter 11 proceedings.

Its objective is to prevent the insolvency and the suspension of payments by the debtor company, and to preserve its enterprise value as far as possible, for the benefit of creditors and shareholders.

The proposed scheme allows a debtor to offer an out-of-court restructuring plan to all or some of its creditors and/or shareholders. The plan can be limited to a subset of creditors and/or shareholders. The court will only be able to confirm the plan when the debtor – in case of an unchanging situation – is or can reasonably be expected to become insolvent.

Interested parties (other than the debtor) may also access the scheme. Creditors, shareholders, employee councils and employee representatives can ask the court to appoint a restructuring expert to put together a restructuring plan. 

The debtor company retains possession of all its assets during the entire procedure. The court can also terminate onerous contracts. However, rights arising from employment contracts cannot be included in the restructuring plans.

The scheme can proceed in private or publicly, and all EU Member States are expected to recognise publically approved restructuring plans. 

In the wider context of the global stage, it is hoped that the new procedure will promote the Netherlands as a focus for restructuring activity.

Call To Action Arrow Image

Latest insights in your inbox

Subscribe to newsletters on topics relevant to you.

Subscribe
Subscribe

Related Insights

mass claim
Restructuring & insolvency

Mass damages claims – how does the WMCA impact bankruptcy proceedings?

Available in English and Dutch

26 February 2021
Briefing

by Ralf van der Pas

Click here to find out more
netherlands
Restructuring & insolvency

WHOA ushers in a new restructuring era in the Netherlands

1 February 2021
Quick read

by Ralf van der Pas

Click here to find out more
netherlands
Coronavirus

COVID-19 in the Netherlands: petition to accelerate the introduction of WHOA

11 May 2020
QUICK READ

by Ralf van der Pas

Click here to find out more