Short Reads

Restructuring: introduction of Dutch Scheme one step closer

Restructuring: introduction of Dutch Scheme one step closer

Restructuring: introduction of Dutch Scheme one step closer

25.09.2019 NL law

On 5 July 2019 the Minister of Justice submitted a bill to parliament that will add a new powerful tool to the Dutch restructuring toolbox. The bill on the "Act on the Confirmation of a Private Restructuring Plan" is expected to introduce a serious competitor to the UK's Scheme of Arrangement and the USA's Chapter 11.

The introduction of the bill will move one step closer on 26 September 2019, when members of the parliament are scheduled to submit their questions and remarks on the bill to parliament's Standing Committee on Justice and Security. A few highlights of this "Dutch Scheme" are set out below.

  1. A fast and efficient procedure to make a restructuring plan binding on creditors (either all creditors or a group) with limited court involvement. The procedure can be finalised in only 4 to 6 weeks.
  2. The debtor remains in possession during the process.
  3. The procedure can either be private – with foreign recognition of the plan based on private international law - or public – with foreign recognition based on the Insolvency Regulation.
  4. Throughout the process the debtor can request the court to apply measures to safeguard the process and to decide on substantive matters to provide deal certainty (such as freezing orders or decisions confirming the division of classes). These requests will be dealt with by specialised judges and with no possibility to appeal these decisions.
  5. Flexibility on the contents of the plan.
  6. Possibility to restructure guarantees provided by (foreign or domestic) group companies of the debtor.
  7. Voting takes place in classes of creditors or shareholders with similar rights or interests as formed by the debtor.
  8. A cross-class cram-down mechanism is included: a plan which is not approved by the requisite majority in every voting class may become binding upon dissenting voting classes.
  9. A plan can only be approved if it meets the absolute priority rule and best interest of creditors test.

Although the Dutch Scheme appears to meet the requirements of the Directive on Restructuring and Insolvency (which came into force on 16 July 2019), the Minister of Justice has decided to implement the Directive by amending the existing suspension of payments proceedings. Our earlier blog about the Directive can be found here.

The Stibbe Restructuring Group is excited about the Dutch Scheme, and we look forward to adding this powerful tool to our restructuring toolbox. We believe - and hope - that the Dutch Scheme will enter into force by the summer of 2020.

Team

Related news

08.11.2019 BE law
Interview with Wouter Ghijsels on Next Gen lawyers

Articles - Stibbe’s managing partner Wouter Ghijsels shares his insights on the next generation of lawyers and the future of the legal profession at the occasion of the Leaders Meeting Paris where Belgian business leaders, politicians and inspiring people from the cultural and academic world will discuss this year's central theme "The Next Gen".

Read more

21.05.2019 NL law
Corporate Recovery & Insolvency in the Netherlands

Articles - Does the legislative framework in your jurisdiction allow for informal work-outs, as well as formal restructuring and insolvency proceedings, and to what extent are each of these used in practice? What formal rescue procedures are available in your jurisdiction to restructure the liabilities of distressed companies? What effect does each restructuring procedure have on existing contracts? How are the creditors and/or shareholders able to influence each winding up process. 

Read more

09.08.2019 NL law
Verifieerbare vorderingen, de stand van zaken na Credit Suisse/Jongepier q.q.

Articles - De afgelopen jaren heeft de Hoge Raad verschillende arresten gewezen over de invloed van het faillissement op wederkerige overeenkomsten, het fixatiebeginsel en de kwalificatie van vorderingen als boedelvordering, verifieerbare vordering of nietverifieerbare vordering. In het arrest van 23 maart 2018 (hierna: Credit Suisse/Jongepier q.q.) verduidelijkt de Hoge Raad ter beantwoording van enkele prejudiciële vragen wanneer vorderingen die voortvloeien uit een ten tijde van het faillissement reeds bestaande rechtsverhouding voor verificatie in aanmerking komen.

Read more

21.05.2019 BE law
The International Comparative Legal Guide to Corporate Recovery & Insolvency 2019 - Belgian chapter

Articles - This Guide covers common issues in corporate recovery and insolvency - including issues that arise when a company is in financial difficulties, insolvency procedures, cross-border issues - in 30 jurisdictions. Pieter Wouters and Paul Van der Putten of Stibbe Brussels' Litigation department contributed to the Belgian chapter of the ICLG.

Read more

13.06.2019 NL law
EU reshaping the restructuring landscape? Directive on Restructuring and Insolvency approved by EU Council

Short Reads - The Council of the European Union adopted a proposal for a Directive on restructuring and insolvency (2016/0359 (COD) on 6 June 2019. The Directive will enter into force twenty days after it is published in the Official Journal of the European Union. From that date, Member States will have two years to implement the substantive parts of the Directive in their national legislation, although a one year extension can be granted.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring