The proposed new Dutch restructuring law: Wet Homologatie Onderhands Akkoord, or WHOA in short, is expected to be enacted in the second half of 2020. The WHOA will enable debtors to offer a tailor-made, court-sanctioned restructuring plan to all or some of their creditors and shareholders while remaining in control of the company. We expect it will be a better restructuring tool than the UK Scheme of Arrangements or the US Chapter 11.
In today’s Dutch restructurings, individual shareholders or creditors can currently hinder the process by refusing to consent to a restructuring plan. By retaining their right to seek (full or partial) repayment of their claim, they can disrupt a restructuring plan and force other, more senior creditors to take a disproportionate haircut on their respective claims or even render the restructuring plan infeasible and force the company into insolvency proceedings. The WHOA aims to resolve this problem.