Author
Ralf van der Pas

Ralf van der Pas

Partner

Read More
Author
Ralf van der Pas

Ralf van der Pas

Partner

Read More

11 May 2020

R&I update - May 2020 – 2 of 5 Insights

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

  • QUICK READ

The number of bankruptcies in the Netherlands is rising. 

Therefore, in mid-April, a number of professors, insolvency practitioners, employers and labour unions petitioned to accelerate the introduction of WHOA (Wet Homologatie Onderhands Akkoord – the Act on Dutch Court Confirmation of Extrajudicial Restructuring Plans to Avert Bankruptcy), the introduction of which was already planned. 

According to the petitioners, accelerating the introduction of WHOA should prevent collective dismissal of employees due to the adverse impacts of COVID-19. WHOA aims to strengthen the reorganisation capabilities of companies that are well-managed despite carrying heavy debts. 

At the moment, there is no powerful restructuring mechanism available in the Netherlands outside of the formal insolvency proceedings (bankruptcy and moratorium of payments). However, the bankruptcy procedure does not function well as a restructuring mechanism because such procedure was not designed for restructuring purposes. A bankruptcy procedure is a liquidation procedure; it aims to liquidate the assets of the debtor in favour of its creditors. Therefore it is no wonder that the bankruptcy procedure has been proven to be not very effective as a restructuring tool. 

It is hoped that the Dutch parliament will acknowledge the need for a speedy introduction of a decent and effective restructuring mechanism.

 
Call To Action Arrow Image

Latest insights in your inbox

Subscribe to newsletters on topics relevant to you.

Subscribe
Subscribe

Related Insights

the-netherlands
Coronavirus

COVID-19 insolvency emergency measures in the Netherlands

17 April 2020
QUICK READ

by Ralf van der Pas

Click here to find out more
high-rise-buildings
Coronavirus

Impact of COVID-19 on private equity portfolio companies: Guidelines for dealing with distress

27 March 2020
IN-DEPTH ANALYSIS

by Selma Baouch and Ralf van der Pas

Click here to find out more
Restructuring & insolvency

New revolutionary insolvency scheme to come out of the Netherlands

13 January 2020

by Ralf van der Pas

Click here to find out more