NETHERLANDS Law and Practice Contributed by: Marcel Willems and Rowan Hamer, Fieldfisher
converted into a debt restructuring scheme for natural persons, or bankruptcy. Bankruptcy Usually, the bankruptcy procedure will not end because the debtor has paid all the creditors’ claims. Sometimes the bankruptcy will end because the debt - or reaches a restructuring plan with its creditors, or, when no restructuring plan is reached, because the trustee proceeds to liquidate the debtor’s assets. The proceeds will be distributed to the creditors in accord - ance with their priority order. In the least favourable (and most frequent) scenario, the bankruptcy is com - pleted with insufficient funds. This may be done in any stage of the bankruptcy procedure; in this case, the creditors with preferential and unsecured claims receive no payment at all, and for efficiency reasons not even a creditors’ meeting will be called. 5.4 The Position of Shareholders and Creditors in Liquidation Estate Claims Estate claims are claims of creditors that arise after the bankruptcy is declared due to deliberate actions or omissions of the trustee in the bankruptcy and claims that qualify as estate claims by law. These are obliga - tions entered into by the trustee for the administration and liquidation of the assets, which include the trus - tee’s own fees, but also wage and rent debts since the bankruptcy declaration. In principle, an estate creditor can claim payment of their claim without having to wait for the liquidation of the assets. In the event that the estate has insufficient assets to pay all estate claims, they are paid in accordance with their respective rank - ing (first the trustee’s fees, then priority estate claims such as wages related to the period after the open - ing of the bankruptcy proceeding, and finally ordinary estate claims such as rent after the opening date). In the suspension of payments and debt restructuring scheme for natural persons, the estate claim fulfils a similar role as in bankruptcy (see 2.2 Priority Claims in Restructuring and Insolvency Proceedings ). Secured Creditors and Right of Retention The basic principle is that secured creditors are enti - tled to enforce their security right as if there were no bankruptcy. In essence, secured creditors have prior - ity over the proceeds of the specific assets on which
they have security. To the main rule that a secured claim has priority over a preferential claim, exists an important exception regarding the preference of the Dutch tax authorities. This preference prevails over a non-possessory pledge, insofar as the pledge rests on movable property at the disposal of the tax debtor which sits on the debtor’s premises and is meant to stay there (usually inventory, not stock). As secured creditors remain essentially outside the bankruptcy procedure, they will not have to share in estate costs. Nevertheless, the secured creditor may be confronted with the consequences of a cooling-off period, which in principle prevents them from exercis - ing their right of enforcement. The trustee may grant the secured creditor a reasonable period to exercise their rights, failing which the trustee is entitled to mon - etise the relevant goods. In this case, the secured creditor retains their priority rights over the proceeds, but has to pay their share of the general bankruptcy costs (the estate costs, including the trustee’s fees). Creditors with a right of retention retain this right if bankruptcy is declared and will have priority over all against whom the retention right can be exercised, including secured creditors. Set-Off/Trading Claims In general, a person who is both a debtor and a creditor of the bankrupt debtor may set off their debt against their claim against the bankrupt debtor, if both arose before the bankruptcy declaration or directly result from legal transactions entered into with the bankrupt debtor before the bankruptcy declaration. Nevertheless, no set-off is allowed if a person has acquired from a third party prior to the bankruptcy declaration a debt to or a claim against the bankrupt debtor, if, when doing so, this person did not act in good faith. Claims or debts taken over after the dec - laration of bankruptcy may not be set off at all. Third-Party Releases Third-party releases generally have no legal effect in the debt restructuring scheme for natural persons, suspension of payments, or bankruptcy proceed - ings. Creditors retain their rights against third par - ties – such as guarantors or group companies – even after the debtor enters insolvency. Any discharge of
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