NETHERLANDS Law and Practice Contributed by: Mandeep Lotay and Dámaris Engelschman, Freshfields LLP
6.2 SPEs SPVs set up for Dutch securitisation transac - tions are usually structured as orphan SPVs, with their legal form being a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) and their shares held by a foundation ( stichting ). Independent corpo - rate service providers are usually mandated with the management of the SPV and its shareholder. Transaction parties undertake various measures to enhance bankruptcy remoteness of the SPV and maximise the expected flow of payments to the SPV’s claimants, as follows: • the scope of the SPV’s activities is limited by delineating the company’s objects in its articles of association so as to only include activities related to the specific securitisation transaction(s) for which it has been incorpo - rated; • the ability to hire employees is contractually restricted to prevent cash flow leakage; • the undertaking of debt obligations and the creation of security other than in relation to the specific securitisation transaction(s) for which it has been incorporated is contractu - ally limited; and • transaction documentation will include limited recourse and non-petition provisions to pre - vent each transaction party from recovering their claim(s) beyond the value of the issuer SPV’s assets, and to protect securitisation transaction waterfalls. 6.3 Transfer of Financial Assets As briefly discussed under 3.1 Bankruptcy- Remote Transfer of Financial Assets , a valid and enforceable transfer of receivables requires: (i) a seller with the power to dispose ( beschikkings - bevoegdheid ) of the receivables; (ii) a valid title
( geldige titel ) for the transfer of the receivables; and (iii) valid delivery ( levering ) of the receivables. The common method for delivering existing receivables is through undisclosed assignment. If the assignment is undisclosed, it is still possi - ble for the underlying obligors to make payment under the relevant receivables to the seller. To prevent a valid discharge ( bevrijdende betaling ) occurring upon payment by the underlying obli - gor to the seller, disclosure of the assignment to the underlying obligor is required. After notifica - tion, discharge of its payment obligations under the receivable is only possible for the underlying obligor by making payment the SPV/purchaser. This is relevant in the event of bankruptcy of the seller. If the underlying obligors are not notified of the assignment, payments under the receiva - bles by the obligors will flow into the estate of the insolvent party. Consequently, the SPV/purchaser will most likely not be ranked first in the payment waterfall with respect to these payments. 6.4 Construction of Bankruptcy-Remote Transactions See 1.2 Structures Relating to Financial Assets and 3.1 Bankruptcy-Remote Transfer of Finan- cial Assets . 6.5 Bankruptcy-Remote SPE Please see 6.2 SPEs .
7. Tax Laws and Issues 7.1 Transfer Taxes
Other than real estate transfer tax (RETT), the Netherlands does not levy any transfer taxes, stamp duties or other (documentary) taxes.
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