NETHERLANDS Law and Practice Contributed by: Gianluca Kreuze, Ruben den Hollander, Anne van Geen and Sanne van Esterik, Loyens & Loeff
ships existing on the date of registration. As a result, the scope of the security should be regularly updated by means of supplemental deeds to capture future receivables that are
private deed (a so-called “omnibus pledge” ). As mentioned, a notarial deed of mortgage and pledge over shares must be executed before a civil law notary. In practice, each party grants a power of attorney to the notary to avoid having to physically appear in front of the notary. The signatures on such powers of attorney must be legalised (including a statement of authority) and furnished with an apostille. A deed of mortgage (in relation to real estate assets and certain registered assets (vessels or aircrafts)) must be executed in the Dutch lan- guage or, if in another language, come together with a certified translation. No language require- ments apply for share pledges or private deeds. Private deeds may be executed in counterparts and no other execution formalities apply. 5.3 Registration Process See 5.2 Form Requirements . 5.4 Restrictions on Upstream Security See 6.2 Restrictions . 5.5 Financial Assistance See 6.2 Restrictions . 5.6 Other Restrictions Parallel Debt It is generally assumed that a Dutch law secu- rity right cannot be validly created in favour of a person who is not the creditor of secured liabili- ties. For this reason, if Dutch law security is held by an agent or trustee for the benefit of other parties, it is standard market practice to use a parallel debt structure (as often included in the credit or intercreditor agreement). This structure creates a separate claim owed by the obligors to the security agent which equals the total amount owed to the secured lenders. A paral- lel debt becomes due and payable at the same
not covered by the initial pledge. Cash deposited in bank accounts
For the purpose of taking cash as collateral, a Dutch bank account is considered to be a receiv- able against the account bank and security is therefore created in the same way as a pledge over receivables. The Dutch general banking conditions render bank account receivables incapable of being pledged and provide for a first ranking right of pledge and a right of set- off for the account bank. To secure a (first rank- ing) right of pledge for the secured party, certain consents/ waivers need to be obtained from the account bank. Due to the increasing burden to monitor clients to mitigate risks regarding mon- ey laundering, Dutch account banks are often reluctant to provide consent to pledge bank account receivables. If the account bank does not want to co–operate, no valid right of pledge can be created. IP rights These are created by way of a right of pledge by entering into a private deed. IP rights are only capable of being pledged if specifically provided for by law. Registration of the private deed with the Dutch tax authorities is only a condition for the creation of a valid right of pledge over licenc- es and domain names. While not a constitutive requirement for the creation of a right of pledge, a right of pledge over IP rights needs to be regis- tered in the relevant IP register to be enforceable
against third parties. Signing Formalities
The security over different types of assets can, to a large extent, be combined in one agreement/
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