(Europa West-Indië Lijnen B.V./Container Leasing International LLC)
A recent judgment of the Amsterdam Court of Appeal marks the latest trend in Dutch law to strengthen the position of the debtor in the context of pre-judgment attachments. The Court of Appeal gave effect to the full disclosure principle that stipulates that the creditor, in its request for leave to make pre-judgment attachments, should properly inform the court of the merits of its claim and the dispute with the debtor.
Introduction
Introduction
The restructuring practice often calls for creative solutions, especially when the stakes are high and the debtor is in serious financial distress. Many restructuring lawyers have at times faced the question of whether it is possible for a debtor to transfer assets to a creditor subject to the condition precedent of the debtor being declared bankrupt.
On 16 September 2011 the Netherlands Supreme Court rendered an important judgment regarding the exercise by a bank of its right to reverse a direct debit (LJN BQ873 SNS Bank/Pasman q.q.). In light of this judgment it can be concluded that, in principle, a bank may exercise its right of reversal not only if the direct debit caused the account to be overdrawn or (if an overdraft facility has been granted) the limit to be exceeded, but also if the bank will, as a result of the debtor/payer's bankruptcy, be unable to recover the claim resulting from the direct debit.
(Originally published on September 29, 2011)
The Act of May 20 2011 implements EU Directive 2009/44/EC (amending the EU Settlement Finality Directive and the EU Collateral Directive), and amends the Collateral Act of August 5 2005. The Collateral Act has always been a lender-friendly implementation of the Collateral Directive. Most of its provisions have not changed and in general, the Collateral Act remains favourable to creditors in insolvency situations and other contexts.
Constitution and perfection of collateral arrangements
In cross border financing transactions, a secured creditor should be aware of Dutch law specifics when dealing with a Dutch obligor in financial distress. Below is a highlighted list of specifics for a secured creditor planning to foreclose on its security or when seeking to improve its security position.
Improving security position
Existing Dutch security documents typically provide for possibilities for improving the position of a secured creditor in case of an event of default.
Getting a tighter grip on collateral
Summary
Providing financial support to related parties that are in financial distress may be in the interest of the group as a whole, but is not necessarily in the direct interest of the individual group company providing such support. This client briefing discusses that issue from a Dutch corporate law and tax law perspective, including the potential consequences if there is a material difference between the financial risks assumed by the Dutch company and the benefits of entering into such a transaction.
Introduction
Introduction