In a restart (doorstart), you buy the viable parts of a bankrupt business from the trustee in bankruptcy (curator) and continue them, while the debts stay behind in the bankrupt company. The main exception concerns staff: in some situations employees still transfer to you by operation of law, on their existing terms.
Dutch law does not use the term restart as a legal instrument. At its core it is an asset transaction: a purchase agreement between you and the trustee, within the limits of the trustee’s powers. Whether the deal is also a clean break for employment purposes depends on the facts, in particular on whether an economic entity that retains its identity is in reality transferred.
What exactly are you buying?
You buy assets and activities, not the company itself. Think of stock, machinery, fixtures and fittings, intellectual property such as the trade name, goodwill and the customer base, in so far as these are transferable and belong to the estate.
In principle you do not take on the debts. They remain in the bankrupt company and are paid from the proceeds of the estate in the statutory order of priority. In that respect an asset deal differs fundamentally from a share deal, in which the company’s past and contingent liabilities come with the shares.
Can a restart be a transfer of undertaking?
Yes, it can. Under Article 7:662 of the Dutch Civil Code (BW), a transfer of undertaking (overgang van onderneming) is the transfer, under an agreement, merger or demerger, of an economic entity that retains its identity. A part of a business can also qualify.
Whether a particular restart qualifies depends on the facts: whether the activities continue, whether customers and assets are taken over and whether most of the workforce in fact carries on working. That assessment directly determines whether employees transfer automatically, as explained below.
Can the trustee sell everything?
No. The trustee can only sell what belongs to the estate, and third-party rights must be respected. Under Article 57 of the Bankruptcy Act (Faillissementswet, Fw), holders of a right of pledge or mortgage may in principle enforce their rights as if there were no bankruptcy.
That does not make a sale by the trustee impossible, but the position and ranking of the secured creditor in the proceeds must be respected. The same applies to retention of title: whether an asset falls outside the estate depends on the validity and scope of the clause and on the facts at the moment of the bankruptcy order. This requires asset-by-asset work; nothing is automatic.
Who decides on the restart?
The trustee decides, under the supervision of the supervisory judge (rechter-commissaris). The trustee administers and liquidates the estate (Article 68 Fw) and may sell assets, publicly or by private sale, with the supervisory judge’s authorisation (Articles 101 and 176 Fw).
The law does not require the trustee to accept the highest bid. Within the task of liquidating the estate, the trustee weighs proceeds, feasibility, certainty of payment and speed. A well-substantiated bid without a financing condition is therefore often preferred to a higher bid with uncertain funding. For a foreign buyer this matters: proof of funds and the authority to sign within days often weigh more heavily than the headline price.
Why is there so much time pressure?
Because a bankrupt business loses value quickly. Staff leave and customers move to competitors, so restarts are usually completed within days rather than weeks.
Due diligence in the usual sense is hardly possible, and the trustee gives no warranties. You buy the assets as they are. Plan for this: prepare your financing, your valuation and your list of key contracts before the bankruptcy order, if you can.
What does the cooling-off period do?
The supervisory judge may order a cooling-off period (afkoelingsperiode) of up to two months, which can be extended once by a further two months (Article 63a Fw). During that period third parties may not take recourse against assets of the estate or reclaim assets in the bankrupt company’s possession without the judge’s authorisation.
This gives the trustee room to negotiate a restart. It is not a general freeze on all third-party rights: creditors of the estate are expressly excluded.
What happens to the employees?
In a bankruptcy, employees do not transfer automatically, because Article 7:666 BW excludes the transfer rules when the employer has been declared bankrupt and the business belongs to the estate. That exception has limits, and it is the point where a restart most often runs into legal trouble.
The main rule is that on a transfer of undertaking, the rights and obligations under the employment contracts pass to the acquirer by operation of law (Article 7:663 BW). The bankruptcy exception only comes into play once it is clear that there is a transfer of undertaking at all. The courts look at the facts, not at the label bankruptcy restart, and recent case law shows both outcomes.
In practice you cannot take for granted the freedom to pick and choose staff on which restarts are often built. A buyer who takes back almost the entire workforce on clearly worse terms, while the business in fact continues seamlessly, runs a real risk that a court finds that the employees transferred after all, with all their existing rights. The prohibitions on discrimination continue to apply in full when you select staff.
The trustee terminates the existing employment contracts with a notice period of no more than six weeks, with the supervisory judge’s authorisation. From the bankruptcy order onwards, wages and related contributions are debts of the estate (Article 40 Fw).
The employee’s side of the story, including the UWV wage guarantee scheme, the transition payment and the position of employees who are ill or pregnant, is set out in your Dutch employer is bankrupt: what happens to your job. Note the difference with the other insolvency route: in a suspension of payments (surseance van betaling) the Article 7:666 exception does not apply, and employees in principle transfer by operation of law.
Can you rely on a pre-pack?
Not with certainty. In the Netherlands a pre-pack currently has no statutory basis, and as a result the bankruptcy exception for employees does not apply to a restart prepared in that way.
In a pre-pack, a restart is prepared quietly before the bankruptcy order, under the supervision of a prospective trustee and a prospective supervisory judge, to preserve value and jobs. For a buyer the attraction is clear: the business loses less value, because customers and staff are not left in uncertainty for weeks.
The Court of Justice of the EU set out the conditions for the insolvency exception to employee protection in Smallsteps (22 June 2017, C-126/16) and Heiploeg (28 April 2022, C-237/20). One of those conditions is that the procedure is governed by statutory or regulatory provisions. The Dutch Supreme Court (Hoge Raad) held in the Heiploeg case that the position of the prospective trustee and prospective supervisory judge is not regulated by statute, so that the pre-pack followed did not meet those conditions (HR 6 October 2023, ECLI:NL:HR:2023:1372).
The bill intended to give the pre-pack a statutory basis, the Business Continuity Act I (Wet continuïteit ondernemingen I), has not entered into force. Until it does, a buyer in a pre-pack must assume that the employees may transfer by operation of law on their existing terms, even if the bid was based on a different assumption.
May the former director restart the business?
Yes. No statutory rule prohibits a restart by a sitting director or shareholder. The trustee will, however, look at such a deal more critically, and two risks weigh more heavily.
A realistic price
To avoid prejudicing the creditors, an independent valuation and a transparent bidding process are almost indispensable when the buyer is a related party. The trustee has to justify the sale to the supervisory judge and the creditors, and a price that cannot be explained will not be accepted.
Director’s liability
Buying the assets does not protect a director against an investigation into mismanagement. If manifestly improper management was an important cause of the bankruptcy, each director is jointly and severally liable to the estate for the deficit (Article 2:248 BW). The general duty of proper performance under Article 2:9 BW also applies.
The threshold for personal liability is high. The Supreme Court recently set aside a judgment of a court of appeal because it had not adequately reasoned why an indirect director should have involved a creditor of one group company in settling the debts of another, separate group company (HR 12 June 2026, ECLI:NL:HR:2026:912). The separate legal personality and debt positions of group companies must therefore be respected.
In certain cases the court can also impose a disqualification order (civielrechtelijk bestuursverbod) of up to five years, for example for serious breach of the duty to inform and cooperate with the trustee or where transactions were annulled under the fraudulent preference rules (Article 106a Fw).
Can the trustee undo transactions before the bankruptcy?
Yes. Under the Dutch fraudulent preference rules (actio pauliana), the trustee can annul transactions that prejudiced the creditors. For a restart prepared in stages before the bankruptcy, that is a real risk.
- Article 42 Fw: a voluntary legal act performed before the bankruptcy that prejudices creditors can be annulled if the debtor knew or ought to have known this. If the act was not gratuitous, as with a sale, the counterparty must also have known or ought to have known.
- Article 47 Fw: payment of a debt that was already due can only be annulled if the recipient knew that a bankruptcy petition had already been filed, or if the payment resulted from consultation between debtor and creditor aimed at favouring that creditor.
Knowledge of prejudice under Article 42 Fw exists if, at the time of the act, both the bankruptcy and a deficit were foreseeable with a reasonable degree of probability for the debtor and the counterparty. Where legal acts form an interconnected whole, such as a series of transactions that together prepare a restart, the Supreme Court has confirmed that both the prejudice and the knowledge of it may be assessed for that whole (HR 20 June 2025, ECLI:NL:HR:2025:975). The trustee may then annul the entire set of transactions, not only the act at which knowledge was actually present.
An example: a director transfers the customer base to a new company some months before the bankruptcy, and the new company later buys the remaining assets from the trustee. If the steps belong together and the bankruptcy was foreseeable at some point in the process, the whole construction is at risk.
What happens to contracts, the lease and permits?
They do not pass to you automatically. The bankruptcy does not end running contracts, but in an asset deal each contract must be transferred separately.
Transfer of a contract (contractsoverneming) requires a deed between the bankrupt company and you, with the cooperation of the counterparty (Article 6:159 BW). Check contract by contract whether transfer is possible and whether the counterparty will agree. Key customers and suppliers often use the moment to renegotiate terms.
The lease is subject to a special regime. Both the trustee and the landlord may terminate it early, with a notice period of three months in any event, and from the bankruptcy order onwards the rent is a debt of the estate (Article 39 Fw). You do not acquire the old lease automatically and will usually need a new lease with the landlord, or a separate transfer of the lease.
Public-law permits are often tied to a person or legal entity and must in most cases be applied for again. Whether a permit can be transferred depends on the specific rules that govern it. Start that process early, because a business cannot always operate without its permits in the meantime.
In summary
- In a restart you buy assets from the trustee; the debts stay behind in the bankrupt company.
- Secured creditors and retention of title must be respected, so check every asset.
- Employees in principle do not transfer in a bankruptcy (Article 7:666 BW), but that exception has limits, and in a pre-pack it currently offers no certainty.
- A restart by the former director is allowed, but requires a realistic price and does not protect against director’s liability.
- Transactions prepared before the bankruptcy can be annulled as a whole under Article 42 Fw.
Frequently asked questions
What does a restart involve?
Continuing viable parts of a business, usually by buying assets from the bankrupt estate through an existing or newly incorporated company. Restart is not a separate legal instrument under Dutch law; it is an asset purchase from the trustee.
Do the debts stay behind?
In principle, yes. The debts remain in the bankrupt company and the trustee pays them from the estate in the statutory order of priority. Security rights such as pledge and retention of title attach to specific assets, however, and must be checked case by case.
Do employees transfer automatically?
Not automatically, but not never either. Article 7:666 BW contains a bankruptcy exception to the automatic transfer of employees, but it only applies if specific conditions are met. In a pre-pack without a statutory basis, the exception currently offers no certainty, as the Smallsteps and Heiploeg case law shows. As a buyer, you cannot simply rely on complete freedom to select staff.
Are you considering a restart, or are you a supplier or landlord affected by one? Law & More advises buyers, directors and creditors on the structure and risks before a bid; see our page on bankruptcy and insolvency.
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