Introduction

On September 23 2009 the Amsterdam District Court granted the holder of a pledge over the shares in the capital of Schoeller Arca Systems Services BV authorization for foreclosure on the pledge by way of a private sale. Foreclosure on a pledge over Dutch shares is rare. The decision introduces the possibility for a secured lender either to wipe out subordinated mezzanine debt or to implement a loan-to-own strategy.

Facts

In 2007 Schoeller Arca Systems, its parent and subsidiaries (known as the SAS Group) entered into:

A recent insolvency law case in the Dutch Supreme Court could have serious consequences for software licensees faced with a bankrupt supplier or licensor. The effect of the judgment may be to render traditional software escrow agreements insufficient and to require additional protective measures.

Summary

On November 1 2007 the State Commission for Insolvency Law presented the Preliminary Bill for an Insolvency Act to the minister of justice. The most important changes to the existing Bankruptcy Act are outlined in this update.

Tax treatment in the hands of the creditor

The Commissioner of Inland Revenue (Commissioner) appealed a decision of Associate Judge Christiansen to approve a payment proposal by Mr Wilson to discharge a debt he owed the Commissioner and thereby avoid a declaration of bankruptcy. 

The Supreme Court’s decision in McIntosh v Fisk has confirmed how the courts will deal with claw back claims under the voidable transactions regime in the context of Ponzi schemes. Liquidators’ recoveries will be limited to the fictitious profits for which there was no value given.

​The Insolvency Working Group's second and final report, released last week, deals with voidable transactions and Ponzi schemes. It proposes a number of changes to the voidable transaction regime, including returning the “gave value" defence to its earlier, more limited, form.

It makes a range of other recommendations across the law of insolvency. Key among them are that the IRD's preferential debt be subject to a limit, and that gift card and voucher holders be treated as preferential creditors.

Three recent decisions clarify issues around personal bankruptcy proceedings.

These include:

• compromise proposals

• procedures for substitution of creditors, and

• vesting of property disclaimed by the Official Assignee.

Debtors' compromises in bankruptcy proceedings

A bankruptcy notice under the Insolvency Act requires the debtor to pay the debt or compromise the amount owing on terms that satisfy the Court or the creditor.

In Body Corporate 341188 v Kelly, a judgment debtor sought to overturn an Associate Judge's decision not to set aside a bankruptcy notice.  The notice was in respect of a District Court judgment and a costs order obtained by the Body Corporate in a separate High Court proceeding.  The debtor argued (among other grounds) that the notice was invalid because it was in respect of two judgment debts rather than one.