NETHERLANDS Law and Practice Contributed by: Marcel Willems and Rowan Hamer, Fieldfisher
4.2 Statutory Restructuring, Rehabilitation and Reorganisation Procedure Scope and Structure The debtor has the discretion to include all creditors and shareholders in the restructuring plan, or just certain categories (“classes”) of them. However, any party whose rights will be altered must be included in the restructuring plan. Nevertheless, the WHOA does not apply to, among other things, employee rights and financial collateral arrangements, and set-off clauses. If the restructuring plan affects different groups of creditors and shareholders, who do not have similar positions as their interests or rights are so dissimilar, the restructuring plan should provide for a class divi - sion. Usually, unsecured creditors, preferential credi - tors, secured creditors, creditors with a right of reten - tion and shareholders are in different classes. The proposed restructuring plan is then voted on by the classes, whereby a class has assented if the deci - sion to assent has been taken by a group of credi - tors/shareholders who together represent at least two-thirds of the total amount of claims/issued capi - tal belonging to the creditors/shareholders who voted within that class. If the class has assented, the court can also make the restructuring plan binding on the dissenting group within the class (intra-class cram- down). In addition, the restructuring plan can also be made binding on a dissenting class of creditors or shareholders (cross-class cram-down). For this to occur, there must be at least one class voting in favour that would be “in the money” – meaning they could reasonably expect some payment in the event of bankruptcy proceedings. It follows from the WHOA regime that the size of the claim is of great importance. There is no formal verification process. The restructuring plan offeror should provide, together with the restructuring plan proposal, a list of creditors and shareholders with vot - ing rights, and the size of their claim or the nominal amount of their share and in which class(es) it is filed. If this amount is disputed, this should be stated. If it appears that incorrect amounts have been included by the restructuring plan offeror, the court will refuse approval of the restructuring plan.
Measures and Judicial Involvement Furthermore, the WHOA provides the debtor with several supporting measures that may serve them in offering the restructuring plan. For example, the WHOA allows the debtor to restructure continuing agreements. Also, the court can be requested to protect securities for financing, which is necessary to continue the business during the proceedings, against a claw-back action (a so-called actio pauli - ana claim instituted by the trustee) in case it should result in bankruptcy. In addition, the WHOA allows specific third party (or non-debtor) releases. It is pos - sible – subject to certain conditions – to release credi - tors’ rights against group companies of the debtor. One of the key requirements is that such rights must relate to obligations of the debtor for which the group companies are jointly liable. Additionally, it must be reasonably plausible that these group companies are themselves unable to continue paying their debts. In addition, the court may be requested to declare a cooling-off period, which may result in restricting creditors’ recourse, lifting attachments or suspend - ing bankruptcy and suspension of payments petitions. The court may also be requested to rule on aspects relevant to the composition of the restructuring plan, including class certification, voting eligibility and the content of the restructuring plan. Furthermore, the court may make such determinations and provisions as it deems necessary to safeguard the interests of creditors or shareholders. Considering that the WHOA explicitly assigns certain powers – such as the confirmation of the restructur - ing plan – to the Dutch (state) courts, parties cannot submit these matters to an arbitral tribunal; judicial involvement is required. Nevertheless, parties are, in principle, free to refer other issues or disputes that arise during the proceedings, such as valuation-relat - ed matters, to arbitration. 4.3 The End of the Restructuring, Rehabilitation and Reorganisation Procedure If at least one class has assented to the restructuring plan, the debtor or the restructuring expert can ask the court to confirm the restructuring plan. This usually requires that the assenting class consists of creditors who, in the event of the debtor’s bankruptcy, can be
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