A consultation is held on a bill introducing special measures against financial undertakings (Intervention Act). The bill would amend the Financial Markets Supervision Act and the Bankruptcy Act in order to extend powers to intervene when financial undertakings find themselves in serious difficulties. The bill reflects developments within the European Union.

This newsletter discusses the draft legislative proposal for a Financial Institutions (Special Measures) Act (Wet bijzondere maatregelen financiële ondernemingen; "Intervention Act") that was recently published for consultation along with a draft explanatory memorandum and a document containing specific questions. The draft proposal would broaden the powers of the Dutch Central Bank (De Nederlandsche Bank; "DNB") and the Minister of Finance to intervene at financial institutions that are experiencing "serious problems".

The Minister of Finance and the Minister of Security and Justice are holding a joint consultation on a bill introducing special measures against financial

In the corporate inquiry (enquête) procedure of Inter Access the Supreme Court recently confirmed a decision by the Enterprise Chamber where immediate measures were ordered which led to the dilution of a majority shareholder's stake. The managing board of the company was allowed to issue shares without a resolution of the AGM.

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

On 1 March 2009, the Guideline on Investigation and Prosecution of Bankruptcy Fraud (Aanwijzing opsporing en vervolging faillissementsfraude; the “Guideline”) entered into force. The Guideline contains rules for the Public Prosecution Office (Openbaar Ministerie) to increase the prosecution of bankruptcy fraud. The Guideline indicates that criminal law will be complementary to the civil law instruments that a receiver (curator) has in bankruptcy proceedings. The Guideline further provides for cooperation between the Public Prosecution Office and receivers.

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

De Nederlandsche Bank (DNB) began the process of appointing receivers Monday for DSB Bank NA (DSB) after DSB experienced a “run” when rumors of its insolvency spread via Twitter and other outlets.

Earlier today, DSB Bank N.V. (DSB) was declared bankrupt and ordered to liquidate, ending hopes the regional lender, which last week suffered a run on deposits and was subsequently put into receivership, might be sold or bailed out.