1489313 - Hogan Lovells FIS Horizons 2021 update - Flipbook - Page 20
Hogan Lovells
20
The Netherlands
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Due to the effects of the COVID-19 pandemic on
businesses, the Dutch government is accelerating
the introduction of a new piece of legislation,
the Confirmation of Extrajudicial Restructuring
Plans (Wet Homologatie Onderhands Akkoord)
(“WHOA”), that provides for both public and
private pre-insolvency restructuring proceedings
which in essence allows debtors (or their creditors)
to compromise certain debts. This new piece of
legislation has been passed by both the House of
Representatives and the Senate. This act has been
published in the Bulletin of Acts and Decrees on
3 November 2020 and entered into force on 1
January 2021.
The restructuring plan can be either a
public or a non-public procedure.
Non-public procedures are confidential to
the parties, will not be covered by the Recast
Insolvency Regulation1 and can be entered
into by any debtor with sufficient nexus to the
Netherlands. Public procedures are – as the
name suggests – public, so all hearings and
judgments are public, will be listed in and
so recognized under the Recast Insolvency
Regulation, are registered in the Dutch trade
register and the Dutch Central Insolvency
Register and are open to entities whose COMI
is in the Netherlands.
•
Once the plan has been drafted, those creditors
and/or shareholders affected must vote on it
(although the debtor can go to court before the
voting takes place to ask for a ruling on matters
such as valuation, class formation and sufficiency
of information). Creditors will be placed into
classes, depending on their respective legal
positions. As a minimum, each creditor must
be placed in a class which under the plan has
the same ranking vis-a-vis other creditors as the
creditor would have had in the insolvency of the
debtor. Secured creditors will generally be classed
together but only for that part of their claim
which is “in the money”, based on a liquidation
valuation. The remainder of the claim will be
treated as unsecured.
•
The plan will be treated as approved by a
class if more than two-thirds in value of the
creditors voting in that class, vote in favor.
For shareholder classes, the threshold is twothirds of the issued capital of those that voted
within that class.
The new process, sometimes known as the “Dutch
Scheme”, is inspired by and based upon the
experience of composition plans in the UK and
the US. As soon as the legislative proposal enters
into force, it will enable debtors to force dissenting
creditors within the scope of the composition
plan to comply with the plan, provided that the
majority of the creditors have approved the
composition plan. More detail is set out below:
•
1
In essence, the WHOA introduces an efficient
debtor-in-possession (“DIP”) procedure which
allows legal entities and individuals which
conduct an enterprise or an independent
profession and which believe they are likely
to be unable to pay their debts in the future,
to present a debt restructuring plan to their
creditors and/or shareholders. The plan can
then be submitted to the court for approval.
Although creditors, shareholders or works
council representatives cannot themselves
propose a restructuring plan, they can petition
the court to appoint a restructuring expert
who may propose such plan on their behalf.
The debtor can propose an alternative plan
to the restructuring expert’s plan. However,
the debtor’s consent is not required for the
restructuring expert’s restructuring plan,
unless the debtor is a small or medium-sized
enterprise (“SME”).
Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings.
