Insolvency 2025

NETHERLANDS Law and Practice Contributed by: Marcel Willems and Rowan Hamer, Fieldfisher

4. Statutory Restructuring, Rehabilitation and Reorganisation Proceedings 4.1 Opening of Statutory Restructuring, Rehabilitation and Reorganisation The WHOA is a statutory procedure in the Nether - lands, which aims to strengthen the reorganisational capacity of businesses. The WHOA focuses primarily on businesses that are in danger of insolvency due to excessive debts, but which still have profitable business activities. This procedure allows debtors to restructure their debts in a pre-insolvency phase, even when there is an absence of consensus among credi - tors and/or stakeholders. In principle, the WHOA applies to any debtor running a business, regardless of the legal form in which it is operated. A debtor has access to the WHOA if it is in a state where it is reasonably likely that it will not be able to proceed with the payment of its debts. This means that the debtor is still able to meet its current obligations but foresees that it will not be able to avoid future insolvency if its debts are not restructured. If the debtor is part of a group of companies, (guarantee) obligations of group companies might be included in the restructuring plan. If the aforementioned state exists, the debtor itself can offer a restructuring plan to its creditors and share - holders, but there is also the possibility that creditors, shareholders or a works council or employee repre - sentative body within the company may take the initia - tive. The initiator has two options under the WHOA: a non-public or a public procedure. Which procedure is preferable will depend on the specific circumstances of the restructuring. Most debtors will prefer a non- public procedure to avoid (negative) publicity poten - tially disrupting the restructuring. On the other hand, the EIR (recast) applies to the public procedure, which may (or may not) be in the interest of the debtor in cross-border situations. For example, the applicability of the EIR may have different consequences for the competence of the Dutch court, creditors with security rights in rem on assets abroad, or international recog - nition of the restructuring plan.

The debtor retains control of the company. Under Dutch law, there is no obligation to enter into consen - sual restructuring negotiations before, for example, formal insolvency proceedings are initiated. Since an out-of-court restructuring is based on con - sensus and is in fact an agreement, it usually requires the unanimous consent of all creditors or stakehold - ers. A debtor may choose not to propose the restruc - turing plan to all creditors, but this will usually not gen - erate support from the creditors. In general, creditors are more likely to co-operate in such restructurings if their position in a potential bankruptcy or suspen - sion of payments procedure is less optimistic, such as unsecured creditors. On the other hand, creditors with security rights, guarantees or sureties, and con - sequently a good or even better prospect of recovery in insolvency proceedings, may have less incentive to co-operate in an out-of-court restructuring. A creditor, in principle, is allowed to act in their own interest and claim payment of the full value of their claim. A dissenting party can only be forced to agree to an out-of-court restructuring plan under excep - tional circumstances. An exception may be made if a creditor’s conduct entails abuse of power (Article 3:13 DCC) and the creditor could not reasonably have refused acceptance of the offer (see 4. Statutory Restructuring, Rehabilitation and Reorganisation Proceedings for a procedure with wider opportuni - ties to bind a dissenting party). 3.2 Legal Status An out-of-court restructuring plan is a consensual agreement that binds those who have voluntar - ily agreed to it or (in exceptional cases) have been ordered by the court to agree. It does not affect those to whom the restructuring plan is not offered or who do not agree. In addition, an out-of-court restructuring plan does not prevent individual dissenting creditors from initiating collection and/or enforcement meas - ures.

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