WHOA: the sup­port­ing meas­ures

Wet Homologatie Onderhands Akkoord

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Published 10 December 2020 Reading time min Author Robin de Wit Insolvency & Restructuring

In vari­ous blogs we inform you on cer­tain aspects of the Dutch Scheme of Arrange­ment (the WHOA). On 1 Janu­ary 2021 this legis­la­tion will become effect­ive. In this blog the vari­ous sup­port­ing meas­ures the WHOA is offer­ing are dis­cussed.

Cool­ing-off peri­od
Upon request the court can set a cool­ing-off peri­od of four months. This peri­od can be pro­longed to a max­im­um of eight months. Dur­ing this peri­od cred­it­ors can­not claim their goods and these goods can be con­sumed, provided that the con­sum­mated goods are paid for.

Pro­tec­tion for res­cue fin­an­cing
Dur­ing the WHOA pro­ced­ure, upon request, the court can pro­tect cer­tain leg­al acts against ret­ro­spect­ive nul­li­fic­a­tion based upon fraud­u­lent pref­er­ence. This is pos­sible if the leg­al act is neces­sary for the con­tinu­ation of the enter­prise and if this is in the interest of the joint cred­it­ors while the interests of an indi­vidu­al cred­it­or will not be harmed sub­stan­tially. So new fund­ing can be pro­tec­ted.

Pre­ser­va­tion of agree­ments / pro­tec­tion against ter­min­a­tion
Dur­ing the WHOA pro­ced­ure con­tract parties can­not ter­min­ate their agree­ments with the debt­or by reas­on of a default pri­or to the WHOA pro­ced­ure or based on a ‘ipso facto’ of change of con­trol pro­vi­sion.

Pos­sib­il­ity to can­cel unfa­vour­able agree­ments
The reor­gan­isa­tion plan under the WHOA may include a request for amend­ment of cer­tain agree­ments. Should the coun­ter­party refuse, the debt­or can can­cel the agree­ment against a max­im­um notice peri­od of three months. A pos­sible com­pens­a­tion for dam­ages caused by this pre­ma­ture ter­min­a­tion can be included in the reor­gan­isa­tion plan. This pro­vi­sion is not applic­able to labour agree­ments. For more inform­a­tion about this sub­ject, we refer to the blog below.

Approv­al of share­hold­ers not required
Even when the art­icles of asso­ci­ation or the share­hold­ers agree­ment stip­u­late dif­fer­ently, a dir­ect­or can start a WHOA pro­ced­ure without share­hold­ers per­mis­sion. A pos­sible dis­missal of a dir­ect­or by the share­hold­er due to start­ing a WHOA pro­ced­ure can be can­celled by the court.

Deal cer­tainty pro­vi­sions
Dis­cus­sions about amongst oth­ers valu­ation, clas­si­fic­a­tion, enti­tle­ment to vote, the entry require­ments can all be brought before court for res­ol­u­tion in an early stage. This offers the debt­or the oppor­tun­ity of inter­im adjust­ments and gives the debt­or more assur­ance that the reor­gan­isa­tion plan will be approved by the court. In this respect it is also import­ant that no appeals against decisions in a WHOA pro­ced­ure are pos­sible.

Sus­pen­sion of an bank­ruptcy request
When a bank­ruptcy applic­a­tion and an applic­a­tion for the appoint­ment of a restruc­tur­ing expert to pre­pare a com­puls­ory set­tle­ment, are brought before the court sim­ul­tan­eously, the court will first decide on the request for appoint­ing a restruc­tur­ing expert. If such request is gran­ted, the court sets a cool­ing-off peri­od dur­ing which peri­od the applic­a­tion for the declar­a­tion of bank­ruptcy will be sus­pen­ded.