NETHERLANDS Law and Practice Contributed by: Gianluca Kreuze, Ruben den Hollander, Anne van Geen and Sanne van Esterik, Loyens & Loeff
ability and pledging of commercial receivables. With the introduction of this law, it will no longer be possible to contractually limit or exclude the transferability or pledging of certain commercial receivables arising from business activities. If parties do agree on such restrictions, they will be considered null and void – existing restric- tions will also become null and void after three months following the date on which the new law comes into force. There are, however, excep- tions for certain types of receivables, such as those related to bank accounts and syndicated loans.
The abolition of pledge prohibitions is expected to significantly expand the credit capacity for Dutch businesses (up to approximately EUR1 bil- lion), as it will remove certain financing obstacles which exist under Dutch law. It is also expected to have a positive effect on asset-based lending activities in the Netherlands where receivables are part of assets and the new law causes the borrowing base to be increased. On the other hand, the proposal has been criticised in legal literature as it is considered to be an interven- tion in the freedom of contract, also affecting contractual clauses in contracts that do not involve SMEs. In addition, critics fear that the position of unsecured creditors will be weakened by allowing more receivables to be pledged, as secured creditors (such as banks) may recover a higher percentage of their loans in insolvency scenarios.
295 CHAMBERS.COM
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