Dutch law provides for an extension of the limitation period in relation to claims that were “deliberately hidden” from the creditor (article 3:321 (f) Dutch Civil Code). The extension also applies if the debtor deliberately hid the fact that the claim had become due and payable (upon fulfilment of a certain condition, for example). It is, however, unclear what kind of conduct qualifies as deliberate hiding.
On 26 May 2020, the Dutch Parliament’s House of Representatives (Tweede Kamer) adopted the Act on confirmation of private restructuring plans (Wet homologatie onderhands akkoord (“WHOA”)). The next step will see the WHOA put to vote in the Senate.
In a recent case, the Court of Appeal of Arnhem-Leeuwarden dismissed a claim of the bankruptcy trustee of Welsec against an audit firm for failing to ensure that the audited company, Welsec, included a provision in its annual accounts for a third party claim (ECLI:NL:GHARL:2020:2492).
Less than three weeks after the Intervention Measures to Mitigate the Effects of the COVID-19 Infectious Disease Epidemic on Citizens and the Economy Act (Zakon o interventnih ukrepih za zajezitev epidemije COVID-19 in omilitev njenih posledic za državljane in gospodarstvo; the “Intervention Act”) came into force, new amendments are on their way.
Slimming down a company, corporate and financial restructuring will be on minds of many managers and company owners in the coming months.
In practice, when deciding to wind down a company, often a decision needs to be made whether to trigger a regular wind-down (likvidacija), a fast-track wind-down (prenehanje družbe po skrajšanem postopku) or a bankruptcy proceeding (stečaj). The main goal usually is to close down the company with less cost and no liability for the shareholder or the management.
1. What to address first
All insolvency proceedings (bankruptcy, and compulsory settlement) and court-sponsored financial restructurings (preventivna prestrukturiranja) in Slovenia are on hold until the recall of the COVID-19 epidemic (proceedings are currently expected to be on hold until 1 July 2020) (the "Recall"). During this time courts will not conduct the above-mentioned proceedings and no procedural and material deadlines will run.
Barely any region, sector or business remains unaffected by the exponentially growing pandemic. Stock market values, and thus also valuations for private companies, are plummeting due to the existing uncertainties.
Against this background, the question arises of how to deal with signed share or asset purchase agreements, if closing is still imminent. From the buyer's point of view, a valuation from the time before the COVID 19 crisis may now appear very expensive. The pandemic may trigger not only contractual provisions but also various legal remedies.
This week the Slovenian Government sent a new law - the first big anti-corona law package - the Intervention Measures to Mitigate the Effects of the coronavirus (COVID-19) Infectious Disease Epidemic on Citizens and the Economy Act into the legislative procedure.
On Monday, 16th March 2020, the Federal Act on provisional measures to prevent the dissemination of COVID-19 (COVID-19-Measures Act) came into effect in Austria.
As mentioned in our earlier blog, the Dutch legislator has prepared a bill – the Act on confirmation of private restructuring plans (Wet homologatie onderhands akkoord) – which introduces a framework allowing debtors to restructure their debts outside formal insolvency proceedings (the “Dutch Scheme“).