DENMARK Law and Practice Contributed by: Henrik Sjørslev, Peter H. Knudsen, Henrik Lund-Koefoed and Levent Kitir, DLA Piper Denmark
The administrator may choose to maintain contracts that have not yet been fulfilled, unless doing so would be contrary to the very nature of such contracts. If a contract is not maintained, the contract party may terminate the contract and file all claims arising there - from with the estate/restructuring administrator. In restructuring proceedings, the administrator may also maintain a contract that has been terminated within the four weeks immediately preceding the initiation of the restructuring process, provided that the con - tract party has not acted upon the termination – eg, if leased inventory has not yet been retrieved. Restructuring timeline and voting rules Unlike bankruptcy proceedings, restructuring pro - ceedings must adhere to strict timelines and can therefore not be extended beyond a total of 12 months from start to finish (provided that all possible post - ponement of deadlines is exhausted). The timeframe for an ordinary in-court restructuring process (though not a fast-track business transfer as discussed later in this section) is as follows. • One week after proceedings have commenced, the administrator must send out notice to all known creditors. • Four weeks after proceedings have commenced (though this can be postponed for up to eight weeks in total): (a) a creditors’ meeting on approval of the restruc - turing plan must have taken place; and (b) the administrator must, at least one week before this meeting, have distributed the pro - posed restructuring plan, outlining the general terms thereof, to all known creditors and the bankruptcy court. • Three months after proceedings have commenced, the administrator must send a report on all material information and accounts of the business during the restructuring proceedings so far to all known creditors. • Six months after the first meeting (though this can be postponed by two months at a time, up to a maximum of four months – ie, an absolute maxi - mum of ten months after the first meeting): (a) a creditor meeting on approval of the restruc - turing proposal must take place; and
(b) the administrator must send the restructuring proposal to all known creditors five days prior to meeting. If no restructuring plan has been adopted within the first eight weeks after the commencement of the proceedings, the debtor can exit the restructuring process and return to ordinary operations; however, beyond this point the only exit opportunity for an insol - vent debtor is to be declared bankrupt. The creditors must – at meetings in the insolvency court – first vote and approve a restructuring plan, and later a restructuring proposal (though these can be put to the vote at the same meeting). The creditors vote according to the proportion of their claim affected by the restructuring. The voting thresholds differ when voting on the plan and the restructuring proposal. The overall restructuring plan is approved unless a simple majority of all the credi - tors affected by the restructuring – and present at the court meeting – vote against it (though it is required that these creditors account for at least 25% of all the claims eligible to vote). The voting rules for the restructuring proposal differ depending on whether the debtor is a large enterprise or a small to medium-sized enterprise, defined by the thresholds in the Danish Annual Accounts Act. For large enterprises, the voting must happen in vot - ing classes. Small to medium-sized enterprises can also request to have these voting rules apply, but the default is that the restructuring proposal for such debtors is adopted if a majority of the creditors pre - sent at the court hearing vote in favour. When the rules on creditor voting classes apply, the restructuring proposal is adopted if a majority of credi - tor classes vote in favour at the court hearing. Credi - tors are put into classes with other creditors of suf - ficient equal interest – eg, financial creditors, public authorities and trade creditors. Creditors holding col - lateral must be put into a separate class. The voting threshold within each class is a simple majority.
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