Yesterday, the Dutch government published a new draft bill seeking to introduce pre-insolvency proceedings in the Netherlands (a previous post on pre-insolvency proceedings can be found here). The draft bill can be found here. An unofficial English translation is available at the website of RESOR.
The intended procedure will be very similar to the English scheme of arrangement, with a few notable differences.
Under the proposed bill, both the debtor and, under certain circumstances, a creditor can propose or initiate a restructuring plan. Like the English scheme, the restructuring plan can be implemented outside formal insolvency proceedings. The restructuring plan can bind all types of creditors and shareholders. It need not include all, but can be directed to only a subset of them.
Unlike the English scheme, neither a convening hearing nor any creditors meetings are required. The vote can take place electronically. Following the vote, the court has to confirm the plan for it to become binding for dissenting parties. The procedure features a Chapter 11-style cram down mechanism, giving the court the power to confirm the plan over the objections of dissenting classes.
The procedure will contain certain flanking measures, such as a stay, the ability to set aside ipso facto clauses, the power to terminate onerous contracts and the right for the debtor to request the court to give binding early determinations on matters of dispute such as jurisdiction, class formation or valuation. The entire procedure is confidential until the confirmation decision has been delivered. It is designed to avoid unnecessary court involvement and to be as swift, efficient and flexible as possible.
The draft is open for consultation until 1 December 2017. It could become law within a year.
Corporate Finance Lab 