Article 369 of the Dutch Bankruptcy Act (Faillissementswet) is the gateway to the Act on Court Confirmation of Extrajudicial Restructuring Plans (WHOA). A debtor that is in a situation where it is reasonably likely that it will not be able to continue paying its debts may offer a restructuring plan (akkoord) to its creditors and shareholders, outside bankruptcy.
Table of contents
Who can use the WHOA?
A debtor that is not yet bankrupt but foresees payment problems. The regime is designed for companies and for natural persons who run a business or independent profession. The plan can also be initiated by a restructuring expert (herstructureringsdeskundige) appointed by the court at the request of a creditor, shareholder or the works council (Article 371 Bankruptcy Act).
What can a restructuring plan change?
The plan can modify the rights of some or all creditors and shareholders, for example by reducing claims, extending payment terms or converting debt into shares. Parties are divided into classes based on comparable rights. Claims of employees under their employment contracts cannot be altered by the plan (Article 369 Bankruptcy Act).
How does the procedure work?
The debtor may file a start declaration (startverklaring) at the district court. This allows it to ask the court for interim measures, such as a cooling-off period (afkoelingsperiode) of up to four months that can be extended to eight months (Article 376 Bankruptcy Act). The creditors and shareholders then vote per class. If at least one class of creditors that can expect payment in bankruptcy approves, the debtor can ask the court to confirm (homologeren) the plan. Once confirmed, the plan also binds those who voted against it, unless the court rejects it on statutory grounds such as the best-interest test (Article 384 Bankruptcy Act).
What does this mean for creditors?
Creditors must take an active role: check the class division, the valuation and the comparison with a bankruptcy scenario, and raise objections in time. A creditor that stays silent may end up bound to a plan that pays only part of its claim.
Frequently asked questions
Is the procedure public?
The debtor can choose a public procedure, which is registered and recognised throughout the EU, or a confidential one.
Can one creditor block the plan?
Not on its own. That is exactly what the WHOA is designed to prevent, provided the statutory safeguards are met.
Related terms
- WHOA restructuring plan
- Article 214 Dutch Bankruptcy Act (suspension of payments)
- Bankruptcy
- Article 1 Dutch Bankruptcy Act (bankruptcy petition)
Our corporate lawyers advise debtors and creditors on restructuring plans and the alternatives to bankruptcy. Want to know what this means for your situation? Book a free introductory meeting.
