DENMARK Law and Practice Contributed by: Henrik Sjørslev, Peter H. Knudsen, Henrik Lund-Koefoed and Levent Kitir, DLA Piper Denmark
The adopted restructuring proposal must be ratified by the court in a court order, having binding effect on all contracting parties and creditors of the debtor. Outcome of restructuring An in-court restructuring can result in a compulsory composition, a sale of business, a combination of the two and any other measures relevant to making the debtor solvent. Debt conversion to equity is not allowed. However, the restructuring proposal can allow the existing share capital to be reduced to a value of 0, following which new shares can be issued. The new share capital must be paid in cash. If a restructuring proposal containing a business trans - fer is adopted and ratified, the company – now having sold the business – will usually be declared bankrupt, and a bankruptcy trustee will be appointed to liquidate any remaining assets. The restructuring administrator will usually also be appointed as bankruptcy trustee. Fast-track business transfer A fast-track business transfer scheme was introduced in March 2021. In accordance with these rules, a busi - ness transfer can be executed by the restructuring administrator prior to a restructuring plan having been approved. Furthermore, such a business transfer can - not be deemed void at a later point if no creditors object within five days of having received notice of the transfer from the administrator. 1.3 Statutory Officers Types of Statutory Officers In bankruptcies, one or more trustees are appointed. In ordinary restructurings, and in preventative restruc - turings with an enforcement action stay, one or more administrators (and possibly also a restructuring accountant) are appointed. Statutory Roles, Rights and Responsibility of Officers A trustee (an insolvency practitioner) is responsible for handling all aspects of an estate, including: • liquidating the assets; • adjudicating claims made against the estate; and
• executing claw-back claims, etc. The trustee reports to the general body of creditors by way of creditor information letters at set intervals, and to the insolvency court through the same letters, among other things. An administrator is responsible for overseeing the management of the active operations of a company, and for detailing the restructuring plan and proposal. The restructuring accountant, if appointed, focuses on validating the value of the assets and the overall financial aspects of the restructuring process. Both report to the general body of creditors, and to the bankruptcy court, by way of creditor information let - A trustee is appointed by the insolvency court. If a trustee election has been requested by a creditor, the court will consult the majority of creditors with voting rights and most often will appoint the trustee nomi - nated by the majority of creditors. A restructuring administrator is appointed by the insol - vency court. If the court finds sufficient grounds, it may decide to appoint additional administrators or replace the current administrator. ters at set intervals. Selection of Officers 2. Creditors 2.1 Types of Creditors The order of priority of claims in formal restructuring is as follows: • administration expenses and debts incurred with the consent of the trustee or restructuring adminis - trator; • employee wages, pensions and holiday allowance (including taxes); • certain special duties/taxes; • simple unsecured claims; and • any interest calculated after the bankruptcy date (usually the petition date) and fines. In bankruptcy proceedings, the bankruptcy adminis - tration costs and debts incurred during the bankrupt -
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