Today, the draft bill on the continuity of companies II (Wet continuïteit ondernemingen II) went into public consultation. The bill is based on a proposal in 2013 by Ruud Hermans and Reinout Vriesendorp of De Brauw Blackstone Westbroek and was discussed with experts from stakeholders. The bill provides for a restructuring procedure inspired by international restructuring practices, in particular English scheme of arrangement and US Chapter 11 proceedings. The bill provides for one of the most significant amendments of the Dutch Bankruptcy Act in decades.
Recent developments
Taking decisions to liquidate companies has become a matter of routine when optimising corporate structures to improve cost efficiency. Increasingly, we see that such decisions have been taken either prematurely or without taking all of the relevant factors into account.
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 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:
This update discusses an issue that may arise in relation to the recognition of foreign bankruptcies where the law of the receiving state does not provide for admittance proceedings. This issue recently arose in the Yukos proceedings.
Facts
Tax treatment in the hands of the creditor
Jollands v Gull concerns an application by the liquidators of a company to set aside insolvent transactions. The transactions involved funds from the sale of the company's business being paid, via the company's accountant, to three minority shareholders, which then transferred their shares to the respondent shareholders (or in one case, a respondent shareholder's family trust). The respondents' current accounts were in credit at the time.