In a Dutch doorstart the viable parts of a bankrupt business are bought out of the estate and continued, usually in an existing or newly incorporated legal entity. The debts stay behind in the bankrupt company, which is then wound up. That difference explains why a restart is attractive, and at the same time why it needs to be handled carefully, because the practice is a good deal more nuanced than “assets in, debts out”.
A restart is not a legal instrument in its own right; Dutch law does not use the term. At its core it is normally an asset transaction: a purchase agreement between the buyer and the trustee in bankruptcy (curator), concluded within the limits that apply to the trustee’s office. Whether that transaction may also be treated as a clean break for tax and employment purposes depends on the actual facts, and in particular on whether there is in reality a transfer of an economic entity that retains its identity.
What exactly are you buying?
You are buying assets and activities, not an undertaking as a whole in the sense of a legal entity. Think of stock, machinery, fixtures and fittings, intellectual property rights such as the trade name, goodwill and the customer base, in so far as these are transferable and form part of the estate.
What you do not in principle take on are the debts. These stay behind in the bankrupt company and are paid out of the proceeds of the estate according to the statutory order of priority. In that respect an asset transaction differs fundamentally from a share transaction, in which you also inherit every historic and contingent liability.
The transfer of undertaking question
It is too quick to say that a restart is always “just” an asset deal without further consequences. Dutch law also treats a part of a business as an undertaking, and provides that a transfer occurs on “the transfer, pursuant to an agreement, a merger or a demerger, of an economic entity that retains its identity” (article 7:662(1) and (2) of the Dutch Civil Code). Whether a particular restart attracts that qualification depends on factual matters such as continuation of the activities, the takeover of customers and assets, and whether most of the workforce in fact carries on working. That has direct consequences for whether employee rights transfer automatically, dealt with further below.
The trustee can only sell what belongs to the estate
Holders of a right of pledge or mortgage may in principle enforce their rights as if there were no bankruptcy (article 57 Fw). That does not make every sale by the trustee impossible, but the position and rank of the secured creditor in the proceeds must be respected. The same starting point applies to retention of title: whether an asset falls outside the estate depends on the validity and scope of the clause and on the factual position at the moment bankruptcy was declared. This is not automatic and requires asset-by-asset work.
Who decides on the restart?
The trustee administers and liquidates the estate under the supervision of the supervisory judge (rechter-commissaris) (article 68 Fw). The trustee is empowered to dispose of assets (article 101 Fw), and the sale takes place publicly or by private treaty with the supervisory judge’s authorisation (article 176 Fw), subject to the statutory exception for sales of limited size.
The law does not require the nominally highest bid to be accepted. Within the task of administering and liquidating the estate the trustee weighs, among other things, proceeds, deliverability, certainty of payment and time. A well-substantiated bid without a financing condition is therefore often preferred over a higher bid with uncertain funding. For a foreign buyer this is worth taking seriously: proof of funds and a mandate to sign within days weigh more heavily here than headline price.
Time pressure
Once bankruptcy has been declared, an estate often loses value quickly as staff leave and customers move on. That is why restart transactions are usually completed within days rather than weeks. Due diligence in the ordinary sense is not available, and the trustee will give no warranties whatsoever.
The cooling-off period
The supervisory judge may order a cooling-off period of no more than two months, extendable once by a further two months, during which no third party may exercise a power of recourse against assets of the estate or reclaim assets without the judge’s authorisation (article 63a(1) Fw). This gives the trustee room to negotiate, but it is not a general block on all third-party rights: creditors of the estate are expressly excluded, and the provision does not affect the right of a pledgee to enforce outside the reach of the cooling-off period.
What happens to the workforce?
For you as buyer this is the item carrying the greatest risk, and at the same time the one about which most misunderstandings exist. The main rule is that on a transfer of undertaking the rights and obligations under the employment contract pass to the acquirer by operation of law (article 7:663 of the Civil Code). Article 7:666 creates an exception where the employer has been declared bankrupt and the undertaking belongs to the estate.
That exception is not a free pass, and it is the point at which a restart can come unstuck legally. It must first be established that there is a transfer of undertaking at all; only then does the bankruptcy exception come into view. If a durably organised economic entity continues to exist while retaining its identity, the workforce may still transfer by operation of law, even after a bankruptcy. That assessment turns on the facts and not on the label “bankruptcy restart”, and the case law of recent years shows both outcomes.
In practical terms this means you cannot treat the freedom to pick and choose, on which restarts are often built, as a given. If you take back virtually the entire workforce on materially worse terms while the business in fact carries on seamlessly, there is a real risk that a court will find a transfer of undertaking after all, with all the entitlements that brings. The prohibitions on discrimination continue to apply in full.
The trustee terminates the running employment contracts observing a notice period of no more than six weeks, for which the supervisory judge’s authorisation is required; from the declaration of bankruptcy, wages and the related contributions are debts of the estate (article 40 Fw).
The full treatment of the employee’s position, with the case law on transfer of undertaking, the UWV wage guarantee scheme, the transition payment and the position on illness or pregnancy, is set out in Your Dutch employer is bankrupt: what happens to your job. Note the difference with the other insolvency route: on a transfer during a suspension of payments the article 7:666 exception does not apply and staff do in principle transfer by operation of law.
Pre-pack: where matters stand
In a pre-pack a restart is prepared quietly before the declaration of bankruptcy, under the supervision of a prospective trustee and a prospective supervisory judge, with the aim of preserving value and employment. For a buyer the attraction is obvious: the business loses less value because customers and staff are not left in limbo for weeks.
Against that sits an uncertainty you must weigh before the transaction. The Court of Justice of the EU set out in Smallsteps and Heiploeg the conditions under which the insolvency exception to employee protection holds good, and one of them is that the procedure is anchored in legislative or administrative provisions (CJEU 22 June 2017, C-126/16; CJEU 28 April 2022, C-237/20). That requirement is the sticking point in the Netherlands. The Dutch Supreme Court held in the Heiploeg case that the position of the prospective trustee and the prospective supervisory judge is not regulated by statute, so that the pre-pack procedure followed did not meet those conditions (Supreme Court 6 October 2023, ECLI:NL:HR:2023:1372).
The bill that would give the pre-pack that statutory basis, the Business Continuity Act I, is as at 24 August 2026 still before the Senate and has not entered into force. As long as that anchoring is missing, there is no guarantee that reliance on the insolvency exception will hold. The consequence for you as buyer is concrete: you may find yourself with a workforce that has transferred by operation of law, on the old terms and conditions, while your bid was based on a different assumption.
May the former director restart the business?
Yes. There is no statutory prohibition on a restart by a sitting director or shareholder. The trustee will scrutinise such a transaction more closely, and two risks weigh more heavily.
A realistic price
To avoid prejudice to creditors, an independent valuation and a transparent bidding process are all but indispensable where the counterparty is a related party.
Director’s liability
Buying the assets does not shield the director from an investigation into improper management. Where manifestly improper management is an important cause of the bankruptcy, every director is jointly and severally liable to the estate for the deficit (article 2:248(1) of the Civil Code), alongside the general standard of proper performance of duties (article 2:9). The threshold for personal liability is high: the Supreme Court recently set aside a court of appeal judgment because it had insufficiently reasoned why a director should have involved a creditor of one group company in settling the debts of another, separate group company (Supreme Court 12 June 2026, ECLI:NL:HR:2026:912). The separate legal personality and the separate debt positions of group companies must therefore be respected, and liability of a direct or indirect director is not readily assumed.
In certain circumstances a disqualification order may also be imposed, among other things for particular forms of prejudicing the estate, for annulled transactions under the fraudulent preference rules, or for serious breach of the duties to inform and cooperate with the trustee (article 106a Fw).
The risk of annulment: fraudulent preference
Transactions preceding the bankruptcy can be attacked by the trustee under the Dutch pauliana:
- Article 42 Fw: voluntary legal acts performed before bankruptcy that prejudice creditors can be annulled if the debtor knew or ought to have known this. Where the act is other than gratuitous, such as a sale, it is also required that the counterparty knew or ought to have known (article 42 Fw).
- Article 47 Fw: payment of debts already due can only be annulled if the recipient knew that bankruptcy had already been petitioned for, or where there was consultation aimed at favouring that creditor above others (article 47 Fw).
There is “knowledge of prejudice” within the meaning of article 42 Fw where, at the time of the act, the bankruptcy and a deficit in it were foreseeable with a reasonable degree of probability for both the debtor and the counterparty. Where a set of legal acts hangs together, for example a series of transactions that together prepare the restart, the Supreme Court has recently confirmed that this knowledge is assessed across the whole: it is sufficient that at some point during the performance of one of the acts belonging to that set the knowledge requirement was met. The trustee may then annul the entire set of transactions, not only the individual act at which the knowledge was actually present (Supreme Court 20 June 2025, ECLI:NL:HR:2025:975). This increases the fraudulent preference risk for restarts staged in phases in the run-up to the bankruptcy.
Contracts, lease and permits
A bankruptcy does not automatically terminate running agreements, and on an asset transaction contracts do not pass to the buyer of their own accord either. Assignment of contract requires a deed between the original contracting party and the third party, together with the express cooperation of the counterparty (article 6:159 of the Civil Code). The buyer must therefore check contract by contract whether transfer is possible and whether the counterparty’s consent is needed.
A special insolvency regime applies to the lease: both the trustee and the landlord may terminate it early, with a notice period of at most three months in any event, and from the declaration of bankruptcy the rent is a debt of the estate (article 39 Fw). The buyer does not acquire the old lease automatically and will usually have to negotiate a new lease with the landlord, or arrange a separate assignment of contract.
Public law permits are often tied to a person or an entity and as a rule have to be applied for again; whether transfer is possible depends on the specific public law regime that governs the permit.
Frequently asked questions
What does a restart involve?
Continuing viable parts of a business, usually through a purchase of assets out of the bankrupt estate by an existing or newly incorporated legal entity. “Restart” is not a legal instrument in its own right under Dutch law.
Do the debts stay behind?
In principle yes: the debts remain in the bankrupt entity and are dealt with by the trustee according to the statutory order of priority. Security rights such as pledge and retention of title, however, attach to the specific asset and must be examined case by case; they do not fall outside the estate automatically and without scrutiny.
Do employees transfer automatically?
Not automatically, but not never either. Article 7:666 of the Civil Code contains a bankruptcy exception to the main rule of automatic transfer, but that exception only applies where specific conditions are met, in particular whether the procedure is genuinely directed at liquidation rather than at continuation of the business. Especially in a pre-pack without a statutory basis this is currently uncertain, as the Smallsteps and Heiploeg case law shows. A buyer cannot therefore simply rely on complete freedom to select.
Considering a restart, or are you a supplier or landlord facing one? Our insolvency lawyers assess the structure and the risks before you bid. See our page on bankruptcy and insolvency, and our hourly rates on lawyer fees in the Netherlands.
This article gives a general overview of Dutch law and European case law as they stand on 24 August 2026 and is not legal advice for a specific situation.
