Background

Under Dutch law, the directors of a (private) company can be held personally liable by the trustee for the bankruptcy deficit. Liability can arise when the directors have manifestly performed their management duties improperly and if it is reasonable to assume that bankruptcy was declared as a result. Section 2:248(4) of the Dutch Civil Code (DCC) contains a list of grounds for reducing the amount of the directors’ liability.

Decision

In bankruptcy as in federal jurisprudence generally, to characterize something with the near-epithet of “federal common law” virtually dooms it to rejection.

In January 2020 we reported that, after the reconsideration suggested by two Supreme Court justices and revisions to account for the Supreme Court’s Merit Management decision,[1] the Court of Appeals for the Second Circuit stood by its origina

Since Article 3: 305a of the Dutch Civil Code entered into force on 1 July 1994, a legal person (usually a foundation) can institute legal proceedings that serve to protect interests outlined in its articles of association (for example, recovering damage caused to the members of the foundation concerned). The mass claims foundation was born.

On 1 January 2021, new Dutch restructuring law Wet Homologatie Onderhands Akkoord (or WHOA) came into effect. Here, we run through what WHOA is and cover the first decisions handed down under the new law.

What is WHOA?

It seems to be a common misunderstanding, even among lawyers who are not bankruptcy lawyers, that litigation in federal bankruptcy court consists largely or even exclusively of disputes about the avoidance of transactions as preferential or fraudulent, the allowance of claims and the confirmation of plans of reorganization. However, with a jurisdictional reach that encompasses “all civil proceedings . . .

I don’t know if Congress foresaw, when it enacted new Subchapter V of Chapter 11 of the Code[1] in the Small Business Reorganization Act of 2019 (“SBRA”), that debtors in pending cases would seek to convert or redesignate their cases as Subchapter V cases when SBRA became effective on February 19, 2020, but it was foreseeable.

Our February 26 post [1] reported on the first case dealing with the question whether a debtor in a pending Chapter 11 case may redesignate it as a case under Subchapter V, [2] the new subchapter of Chapter 11 adopted by the Small Business Reorganization Act of 2019 (“SBRA”), which became effective on February 19.

Our February 26 post entitled “SBRA Springs to Life”^[1] reported on the first case known to me that dealt with the issue whether a debtor in a pending Chapter 11 case should be permitted to amend its petition to designate it as a case under Subchapter V,^[2] the new subchapter of Chapter 11 adopted by

The number of bankruptcies in the Netherlands is rising.

Therefore, in mid-April, a number of professors, insolvency practitioners, employers and labour unions petitioned to accelerate the introduction of WHOA (Wet Homologatie Onderhands Akkoord – the Act on Dutch Court Confirmation of Extrajudicial Restructuring Plans to Avert Bankruptcy), the introduction of which was already planned.